Western Canada Select (WCS) crude’s discount to the benchmark West Texas Intermediate (WTI) narrowed on Tuesday, the first day of the monthly trade cycle:
WCS for February delivery traded around $26.50 a barrel below WTI, according to one market player. On Friday WCS settled around $27.40 a barrel below the U.S. benchmark.
The discount on Canadian heavy crude has narrowed since TC Energy restarted the Cushing, Oklahoma, leg of the Keystone oil pipeline last week. The 622,000 barrel-per-day pipeline delivers Canadian crude to U.S. refineries and was shut down on Dec. 7 after spilling 14,000 barrels in Kansas.
Energy consultancy Wood Mackenzie, which monitors pipeline flows, said on Tuesday the Hardisty, Alberta, to Steele City, Nebraska, portion of the pipeline is above 90% utilization from about 50% utilization in the second half of December.
Global oil prices tumbled 4% in volatile trade, pressured by weak demand data from China, a gloomy economic outlook and a stronger U.S. dollar.