The discount on Canadian heavy crude versus the West Texas Intermediate (WTI) benchmark tightened on Friday, the last day of the monthly Canadian crude trading window.
Western Canada Select (WCS) heavy blend crude for August delivery in Hardisty, Alberta, settled at $20.00 a barrel below WTI, according to NE2 Group, narrowing $1.60 from the previous day.
Still, heavy crude differentials remained wide due to factors including the U.S. Strategic Petroleum Reserve’s release of sour crude barrels, and the high cost of natural gas making refining heavy crude more expensive.
Light synthetic crude from the oil sands for August delivery settled at $14.50 a barrel over WTI, unchanged from the previous day.
Global oil prices gained 2.5% after a U.S. official told Reuters that an immediate Saudi oil output boost was not expected, and as investors question whether OPEC has the room to significantly ramp up crude production.