Canadian heavy crude’s differential to West Texas Intermediate (WTI) tightened on Wednesday, the first day of the new monthly trading window.
Western Canada Select heavy blend crude for January delivery in Hardisty, Alberta, last traded at $18.55 per barrel below the WTI benchmark, according to NE2 Canada Inc, narrowing from the previous day’s settle of $19.00 per barrel below the U.S. crude benchmark.
The market is holding steady despite the Trans Mountain pipeline, which ships 300,000 barrels per day of crude and refined products to Burnaby, British Columbia, from Alberta, being shut down since Nov. 14 because of heavy flooding in B.C.
Trans Mountain said on Wednesday it is only a few days away from restarting the pipeline at reduced capacity.
Inventories in western Canada are high, according to one market source, but did not appear to be building as a result of the Trans Mountain outage, suggesting other export pipelines are picking up the slack.
Canadian crude market traders are also having to take into account choppy moves in global oil prices, which impact the outright price of WCS.
Global oil prices settled lower as an early rally fizzled out and selling intensified on worries the Omicron variant of coronavirus could cut oil demand as global supply builds.