Western Canada Select (WCS) crude’s discount to the benchmark West Texas Intermediate (WTI) narrowed marginally on Tuesday, as global oil prices settled at their lowest levels this year.
WCS heavy blend crude for January delivery in Hardisty, Alberta, traded between $28.25 and $27.50 a barrel under WTI, according to brokerage CalRock, narrowing from the previous session’s trading range of $28.30 to $27.90 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 center, remains subdued.
Cenovus Energy said the Toledo, Ohio, refinery, which is a major taker of heavy crude and has been offline since a fire in September, will restart operations in the first quarter of 2023.
Global oil prices fell in frenzied trading to their lowest settlement levels this year, with Brent finishing below $80 per barrel for the second time in 2022, as investors fled the volatile market in an uncertain economy.