Canadian heavy crude’s discount to West Texas Intermediate (WTI) deepened sharply on Tuesday, to reach its widest level since April 2020.
Western Canada Select heavy blend crude for December delivery in Hardisty, Alberta, last traded at $17.20 per barrel below the WTI benchmark, according to NE2 Canada Inc, widening from a settlement of $15.25 per barrel below the benchmark on Monday.
Two market sources said strong oil sands production in October had led to a build in storage inventories in Alberta, which was weighing on prices.
A fire at Cenovus Energy’s Lima refinery last week, which is in the middle of a multi-unit turnaround, also contributed to the widening differential, one source added.
The discount on Canadian heavy crude has widened in recent weeks, tracking weaker heavy crude prices on the U.S. Gulf Coast and at the U.S. crude futures hub in Cushing, Oklahoma.
Global oil prices traded below $85 a barrel but remained close to a three-year high in choppy trade as traders looked toward a meeting of the OPEC+ producer group on Thursday.