The discount of Western Canada Select (WCS) heavy crude to the North American benchmark West Texas Intermediate futures (WTI) narrowed on Thursday.
WCS for May delivery in Hardisty, Alberta, settled at $9.85 a barrel under WTI, according to brokerage CalRock, after having settled at $10.30 under the U.S. benchmark on Wednesday.
* The Keystone oil pipeline from Canada to the U.S. was shut on Tuesday after an oil spill in North Dakota. South Bow, owner and operator of the 4,327-km (2,689-mile) pipeline, was on Thursday still investigating the cause of the leak while working to restore service, it said in a statement. It did not provide a timeline for the restart.
* 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. * Oil prices settled more than $2 per barrel lower on Thursday, wiping out the last session’s rally, as investors reassessed a planned pause in sweeping U.S. tariffs and focus shifted to a deepening trade war between Washington and Beijing.
(Reporting by Georgina McCartney in Houston; Editing by Maju Samuel)