Western Canada Select (WCS) heavy crude’s discount to the benchmark West Texas Intermediate (WTI) tightened on Tuesday.
WCS for June delivery in Hardisty, Alberta, ended the day at $13.40 a barrel under the benchmark, according to brokerage CalRock. On Monday the Canadian heavy benchmark settled at $13.60 a barrel under WTI.
Market players are concerned about wildfires in Alberta that have shut in at least 319,000 barrels of oil equivalent per day (boepd), or 3.7% of the country’s production. The blazes are currently impacting mainly light oil and gas production, but eased on Wednesday as cooler temperatures helped firefighters make progress.
So far companies have not reported any damage to production facilities and the Canadian Association of Petroleum Producers said some companies had been able to restart in areas where the fire risk had lessened.
Global oil prices ticked up, reversing a more than 2% drop earlier in the session, as markets weighed the U.S. government’s plans to refill the nation’s emergency oil reserve and anticipated higher seasonal demand.
That put the outright price of WCS at just over $60 a barrel.