The discount of Western Canada Select (WCS) heavy crude to the North American benchmark West Texas Intermediate futures (WTI) widened on Tuesday.
WCS for May delivery in Hardisty, Alberta, settled at $10.10 a barrel under WTI, according to brokerage CalRock, after having settled at $9.15 under the U.S. benchmark on Monday.
* The Keystone oil pipeline from Canada to the U.S. was shut on Tuesday after an oil spill near Fort Ransom, North Dakota, its operator South Bow and the state’s Department of Environmental Quality said.
* The WCS discount also reflects some tightness following U.S. sanctions on heavy crude-producing countries such as Venezuela, as well as lower heavy crude exports from Mexico.
* But the differential on Canadian heavy crude also tends to widen when global oil prices are higher overall and narrow in lower price environments, in part because lower prices mean less competition for pipeline space for Canadian producers. * Global oil prices settled down more than $1 a barrel on Tuesday at a four-year low as investors priced in an increasing likelihood of a recession due to the escalating trade war between the U.S. and China, the world’s two biggest economies.
(Reporting by Georgina McCartney in Houston; Editing by Maju Samuel)