Canadian heavy crude’s discount to West Texas Intermediate (WTI) tightened on Wednesday.
Western Canada Select (WCS) heavy blend crude for October delivery in Hardisty, Alberta last traded at $11.90 per barrel below the WTI benchmark, according to NE2 Canada Inc, tightening from Tuesday’s settlement of $12.10 a barrel under the benchmark.
Traders are looking ahead to Enbridge Inc starting line fill on its expanded Line 3 oil pipeline, which will offer capacity of 620,000 barrels per day in October, one industry source said.
Line 3 currently ships around 370,000 bpd. Enbridge has been working for years on replacing the existing pipeline so it can boost crude exports from Alberta to the U.S. Midwest.
The Canadian heavy crude market is also finding support from demand for heavy sour grades on the U.S. Gulf Coast, where oil and gas companies are still working to get offshore operations back up and running after Hurricane Ida.
Light synthetic crude from the oil sands for October delivery last traded at $1.65 per barrel below WTI, unchanged from the previous day.
Global oil prices settled up more than 1% as Gulf of Mexico producers made slow progress in restoring output after Hurricane Ida.