Western Canada Select (WCS) crude’s discount to the benchmark West Texas Intermediate (WTI) tightened on Monday:
WCS heavy blend crude for January delivery in Hardisty, Alberta, traded between $28.30 and $27.90 a barrel under WTI, according to brokerage CalRock, narrowing from the previous session’s settle of $28.50 a barrel under the benchmark.
WCS differentials have been under pressure since late September when factors including a drop in U.S. refinery demand, competition from cheap Russian barrels on the global market and rising Canadian production combined to push the discount sharply wider. Demand for heavy barrels on the U.S. Gulf Coast, the world’s largest refining centre, remains subdued.
Global oil prices fell by more than 3%, following U.S. stock markets lower, after U.S. service sector data raised worries that the Federal Reserve could continue its aggressive policy tightening path. (Reporting by Nia Williams)