The discount on Western Canada Select (WCS) heavy crude versus the North American benchmark West Texas Intermediate (WTI) was little changed on Tuesday, the first day of the monthly trading cycle:
* The discount on WCS for February delivery in Hardisty, Alberta, began trading at $19.35 a barrel under WTI, dropping to $18.55, according to brokerage CalRock. The January contract had been trading between $18.50 and $18.90 a barrel last month before the trading cycle ended.
* Market players are concerned about potential delays to the 590,000 barrel-per-day Trans Mountain expansion project, with the government-owned pipeline company asking regulators to allow a change in construction.
* The additional capacity is expected to support WCS prices, with forward price curves indicating a reduced discount by mid-year, said ATB Capital Markets analyst Patrick O’Rourke.
* Trans Mountain pipeline nominations are apportioned by 24% in January.
* Global benchmark oil prices dropped on interest rate jitters and as concerns eased that tensions in the Red Sea could disrupt supplies.
(Reporting by Rod Nickel in Winnipeg, Manitoba)