Railcars holding crude oil
The discount on Canadian heavy crude versus the West Texas Intermediate (WTI) benchmark narrowed on Monday, but remained wider than $20 a barrel.
Western Canada Select (WCS) heavy blend crude for August delivery in Hardisty, Alberta, last traded at $21 a barrel below WTI, according to NE2 Group, narrowing from $22.10 on Friday.
Heavy crude differentials have come under pressure for a number of reasons, including the release of sour crude from the U.S. Strategic Petroleum Reserve and higher natural gas prices that make refining heavy crude more expensive.
Analysts at BMO Capital Markets said in a note to clients those factors could help keep pressure on heavy oil spreads through the fall, but they expect the discount to narrow as Mexican imports to the U.S. decline in 2023.
Light synthetic crude from the oil sands for August delivery changed hands at $13.25 a barrel over WTI, according to an industry source, having settled at $13.50 a barrel over the benchmark the previous session.
The CEO of Canada’s third-largest oil producer Suncor Energy stepped down late on Friday after another fatality at one of the company’s oil sands sites.
Global oil as prices were little changed markets balanced an expected drop in demand due to mass testing for COVID-19 in China against ongoing concerns over tight supply.