Western Canada Select (WCS) heavy crude’s discount to the benchmark West Texas Intermediate (WTI) tightened on Thursday.
WCS for June delivery in Hardisty, Alberta, traded as low as $14.00 a barrel under WTI before settling at $14.30 a barrel under the benchmark, according to brokerage CalRock. On Wednesday it traded between $14.80 and $14.55 a barrel under WTI.
Pipeline company Enbridge Inc reached a toll agreement with oil shippers for its Mainline crude pipeline system, a critical export conduit for Canadian barrels.
Canadian Natural Resources Ltd’s President Tim McKay told an earnings call that pipeline egress is a key driver of WCS differentials, and he expected them to tighten further this year.
Global oil prices settled nearly unchanged after the European Central Bank decided to slow the pace of interest rate hikes, but prices are still down more than 9% for the week on demand concerns in major consuming countries.
That put the outright price of WCS around $54 a barrel.