Canadian heavy crude’s differential to benchmark West Texas Intermediate (WTI) crude widened slightly on Thursday.
Western Canada Select heavy blend crude for February delivery in Hardisty, Alberta, last traded at $12.40 per barrel below the WTI benchmark, according to NE2 Canada Inc, having settled at $12.10 per barrel below the U.S. crude benchmark on Wednesday.
Despite the widening, WCS differentials remained close to their strongest levels since October, supported by a prolonged bout of extreme cold weather across much of western Canada that slowed down oil and gas production.
One industry source said the lengthy cold spell had contributed to a strong draw on western Canadian crude inventory levels, taking them below the five-year average.
Energy information provider Wood Mackenzie said the most recent data showed there were 31.8 million barrels in storage, of which 29 million barrels were crude and 2.8 million barrels were diluent, used to thin oil sands bitumen so it can flow through pipelines. The five-year average is around 34 million barrels.
TC Energy shut down its 590,000 barrel-per-day Keystone pipeline on Tuesday for unplanned maintenance, before resuming operations on Wednesday evening. TC said the extreme cold in Hardisty, Alberta, hampered the restart.
A worker was killed after a vehicle collision at Suncor Energy’s base plant on Thursday morning.
Light synthetic crude from the oil sands for February delivery narrowed 80 cents to 55 cents per barrel below the WTI benchmark.
Global oil prices rose about 2%, extending their new year’s rally, on escalating unrest in OPEC+ oil producer Kazakhstan and supply outages in Libya.