The discount on Canadian heavy crude versus the West Texas Intermediate (WTI) benchmark tightened on Thursday.
Western Canada Select (WCS) heavy blend crude for July delivery in Hardisty, Alberta settled at $19.30 a barrel below WTI, according to NE2 Group, narrowing from the previous day’s settlement of $19.60 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.
One industry source said this week’s draw on Canadian crude inventories had helped keep the discount within $20 a barrel.
Light synthetic crude from the oil sands for July delivery settled at $7.50 a barrel over WTI, supported by oil sands maintenance and strong North American distillate demand.
Global oil prices dipped, but still hovered near three-month highs after parts of Shanghai imposed new COVID-19 lockdown measures, as strong gains in refined products contributed to an ongoing bullish backdrop for crude oil.