The differential of Western Canada Select (WCS) heavy crude versus the North American benchmark West Texas Intermediate (WTI) narrowed on Monday, the first day of the new monthly trading cycle.
WCS for May delivery in Hardisty, Alberta, traded between $12.10 and $12.40 below WTI, according to brokerage CalRock. On March 14, the last day of the previous trading cycle, April WCS traded at $15.35 and $15.40.
The Trans Mountain oil pipeline expansion has begun line fill, raising demand for Canadian crude at a time when oil sands mines are approaching their spring turnarounds.
The pipeline expansion is expected to begin service in the second quarter and is the main factor driving narrower differentials, an industry source said.
WCS-WTI spreads look to narrow to $9.50 per barrel in the third quarter, RBC Dominion Securities said in a note.
On Trans Mountain’s existing pipeline, nominations are apportioned by 24% for April, the company said.
Global oil futures climbed 1% to a five-month high on expectations oil demand will climb following the release of positive economic news from the U.S. and China.
(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Maju Samuel)