The discount on Canadian heavy crude versus the West Texas Intermediate benchmark widened on Friday, while synthetic prices also weakened.
Western Canada Select heavy blend crude for July delivery in Hardisty, Alberta, last traded at $20.65 a barrel below WTI, according to NE2 Group, widening from the previous settlement of $19.00 a barrel under the benchmark.
Canadian heavy barrels have continued to track weakness in Gulf Coast heavy grades like Mars sour, a market source told Reuters this week. The U.S. government’s Strategic Petroleum Reserve release has been weighted towards heavy sour crude, boosting supply and pushing prices lower.
Light synthetic crude from the oil sands for July delivery last traded at $7.30 a barrel over WTI, dipping 5 cents from the previous settlement.
Maintenance at oil sands upgraders, including the Syncrude project majority-owned by Suncor Energy is reducing synthetic crude supply and keeping prices at elevated levels.
Oil settled higher on Friday, supported by expectations that OPEC’s decision to increase production targets by slightly more than planned will not add that much to global supply which should tighten as China eases COVID restrictions.