Canadian heavy crude’s discount to West Texas Intermediate (WTI) deepened further on Wednesday, reaching its widest level since April 2020.
Western Canada Select heavy blend crude for December delivery in Hardisty, Alberta, last traded at $18.50 per barrel below the WTI benchmark, according to NE2 Canada Inc, widening from a settlement of $17.20 per barrel below the benchmark on Tuesday.
Market sources said strong oil sands production is weighing on differentials, which are also tracking weaker heavy crude prices on the U.S. Gulf Coast and at the U.S. crude futures hub in Cushing, Oklahoma.
Refining turnarounds on the U.S. Gulf Coast, a major heavy crude demand center, are contributing to the widening differential between U.S. benchmark crude and WCS, a Cenovus Energy executive told an earnings call on Wednesday.
Despite the deeper discount, the outright price of Canadian heavy barrels remains relatively strong, thanks to a rally in U.S. crude this year.
Global oil prices fell to a near four-week low after U.S. crude stocks rose more than expected, as gasoline inventories in the world’s largest oil consumer hit a four-year low.