Canadian heavy crude’s discount to West Texas Intermediate (WTI) tightened on Thursday.
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. It tightened from Wednesday’s settlement of $11.95 a barrel under the benchmark, which was the narrowest level the discount has closed at since early May.
Industry sources said the market is being supported by increased capacity on Enbridge Inc’s Line 3 pipeline, which is due to start shipping 620,000 barrel per day in October, and production outages on the U.S. Gulf Coast after Hurricane Ida damaged energy infrastructure.
Light synthetic crude from the oil sands for October delivery last traded at $1.40 per barrel below WTI, narrowing from Wednesday’s settlement of $1.65 a barrel below the benchmark.
Global oil prices fell to a two-week low as China rolled out a plan to release state oil reserves, the U.S. weekly crude draw was smaller than expected and U.S. Treasuries rallied as investors sought safer assets.