The discount on Western Canada Select (WCS) heavy crude versus the North American benchmark West Texas Intermediate (WTI) narrowed on Friday.
WCS for April delivery in Hardisty, Alberta, began trading at $15.75 and ended the day at $15.65 per barrel under WTI, according to brokerage CalRock. WCS had traded between $15.75 and $16.30 per barrel below the U.S. benchmark on Thursday.
WCS prices have strengthened on optimism about the Trans Mountain pipeline expansion beginning line fill in April ahead of a second-quarter startup, and tight crude supplies, traders and analysts say.
Eight Capital analysts said they expect differentials to narrow to single digits in the second quarter due to the Trans Mountain expansion startup.
TC Energy’s Keystone oil pipeline restarted on Thursday after being offline for five hours due to an unfounded leak concern.
Global oil futures closed 1% lower and fell even more for the week as markets remained wary of soft Chinese demand even as producer group OPEC+ extended supply cuts.
(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Sandra Maler)