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 last traded at $18.75 a barrel below WTI, according to NE2 Group, narrowing 55 cents from the previous day’s settlement.
Despite the narrowing, the discount Canadian heavy barrels remain within sight of recent lows around $20 a barrel under WTI. 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 and is crimping demand for Canadian barrels.
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 fell, after U.S. consumer prices rose more than expected and China imposed new COVID-19 lockdown measures.