The discount on Canadian heavy crude versus the West Texas Intermediate benchmark narrowed slightly on Wednesday.
Western Canada Select heavy blend crude for July delivery in Hardisty, Alberta settled at $19.60 a barrel below WTI, according to NE2 Group, narrowing from the previous day’s settlement of $19.85 a barrel under the benchmark.
The discount Canadian heavy barrels remains close to recent lows around $20 a barrel under WTI, last seen in early 2020. WCS prices are being weakened by the U.S. government’s Strategic Petroleum Reserve release, which has flooded the Gulf Coast market with sour crude.
BMO Capital Markets analyst Randy Ollenberger wrote in a note to clients he expected the discount to narrow as Mexican imports to the U.S. decline in 2023.
Light synthetic crude from the oil sands for July delivery settled at $7.50 a barrel over WTI, supported by oil sands maintenance.
Global oil prices jumped over 2% to a 13-week high as U.S. demand for gasoline continued to rise despite record pump prices.