The discount on Western Canada Select (WCS) heavy crude versus the North American benchmark West Texas Intermediate (WTI) narrowed on Thursday:
* WCS for May delivery in Hardisty, Alberta, settled at $13.60 a barrel below WTI, according to brokerage CalRock, after closing at $14.30 a barrel below the benchmark on Wednesday.
* Canadian heavy crude differentials have tightened sharply this month on news the 600,000 barrel-per-day Trans Mountain pipeline expansion project would start operating on May 1.
* In a note to clients, Scotiabank analysts said TMX will likely shift full-year WCS differentials to $$13-$15 a barrel below WTI, helped by heavy crude refining capacity globally exceeding heavy oil production growth.
* WCS differentials are also being supported by BP’s Whiting, Indiana, refinery ramping up after an unplanned outage in February, the start-up of a new Mexican heavy oil refinery and a lighter U.S. refinery turnaround schedule, Scotiabank said.
* Global oil prices settled lower as sticky inflation dampened hopes for near-term U.S. interest rate cuts, but worries that Iran might attack Israeli interests kept crude near six-month highs.
(Reporting by Nia Williams in British Columbia; Editing by Sherry Jacob-Phillips)