Canadian synthetic crude strengthened slightly on Thursday, buoyed by strong demand as a result of oil market turmoil following Russia’s invasion of Ukraine.
Light synthetic crude from the oil sands for April delivery settled at $4.90 barrel above the West Texas Intermediate (WTI) benchmark, according to NE2 Canada Inc, up slightly from Wednesday’s settle of $4.75 a barrel over the benchmark.
Traders around the globe have been scrambling to secure barrels after sanctions on Russia prompted oil industry players to shun Russian crude, and inventories in North America are low.
The maintenance season in the oil sands is also contributing to tighter supply.
Western Canada Select heavy blend crude for April delivery in Hardisty, Alberta settled at $12.50 per barrel below the WTI benchmark, according to NE2 Canada Inc, widening from Wednesday’s settle of $11.65 a barrel over WTI.
One industry source said refiners had been adjusting their crude slates, and selling WCS in favour of heavier sour crude. Fundamentals remain strong however, and point to higher demand, the source added.
Producers in Canada, home to the world’s third-largest reserves, have no plans to significantly boost output despite the surging demand for crude globally.
Two oil tankers owned and managed by Sovcomflot, the Russian maritime and freight shipping company that the United States blacklisted last week, are rerouting from their eastern Canadian destinations, according to tracking data and marine sources.
Oil slid 2% after hitting prices not seen in roughly a decade, as sellers jumped on hopes the United States and Iran will agree soon on a nuclear deal that could add barrels to a tight global market.