Canadian heavy crude’s differential to benchmark West Texas Intermediate (WTI) crude narrowed on Tuesday, the last day of the monthly Canadian crude trading window.
Western Canada Select heavy blend crude for January delivery in Hardisty, Alberta, last traded at $16.30 per barrel below the WTI benchmark, according to NE2 Canada Inc, having settled at $16.45 per barrel below the U.S. crude benchmark on Monday.
Canadian heavy crude is being supported by stronger heavy oil demand on the U.S. Gulf Coast, and a slight draw in inventories in Alberta, one industry source said.
Strong throughput on the Enbridge Mainline system is helping offset reduced capacity on the Trans Mountain pipeline, which restarted on Dec. 5 after a three-week shutdown because of floods in British Columbia. Trans Mountain expects to deliver more than 75% of normal volumes in December, a company spokeswoman said.
Nominations from shippers to transport crude on the Enbridge Mainline system are due on Wednesday.
Suncor Energy Inc is ramping up production at its Fort Hills oil sands project in Alberta in late December. That will increase Fort Hills production to roughly 184,000 barrels per day from around 157,000 bpd.
Global oil futures prices dropped after the International Energy Agency (IEA) said the Omicron coronavirus variant is set to dent a recovery in global demand.