Canadian heavy crude’s differential to benchmark West Texas Intermediate (WTI) crude narrowed on Wednesday for the third straight day.
The narrowing differential reflects strong flows to the U.S. Midwest on the recently replaced Enbridge Inc Line 3 pipeline, strengthening prices for heavy oil in the U.S. Gulf, and declining Canadian inventories, a Calgary industry source said.
Western Canada Select heavy blend crude for January delivery in Hardisty, Alberta, was trading at $16.70 per barrel below the WTI benchmark, according to NE2 Canada Inc, having settled at $16.95 per barrel below the U.S. crude benchmark on Tuesday.
The Trans Mountain oil pipeline restarted on Sunday following a three-week shutdown due to heavy flooding in British Columbia.
Trans Mountain ships 300,000 barrels per day (bpd) of crude and refined products to Burnaby, British Columbia, from Alberta.
Oil producer Cenovus Energy said it turned on 20,000 bpd of rail capacity during Trans Mountain’s outage.
Global oil prices ended higher in a back-and-forth session, maintaining a positive tone as investors no longer expect the Omicron coronavirus variant to derail global economic growth.