Canadian heavy crude pricing continues to show strength, as the discount on Western Canada Select (WCS) to the North American benchmark West Texas Intermediate futures (WTI) narrowed again on Wednesday.
WCS for June delivery in Hardisty, Alberta, settled at $8.75 a barrel under the U.S. benchmark WTI, according to brokerage CalRock, after having settled at $8.95 under the U.S. benchmark on Tuesday.
The last time Canadian heavy crude traded at such a tight discount to the U.S. benchmark was in 2020, amidst global pandemic-related oil price volatility.
* Canadian heavy crude has been trading at a tight discount in recent months in part due to the opening of the Trans Mountain pipeline expansion one year ago, which boosted the country’s oil export capacity. WCS also typically sees seasonal strength this time of year as the return of summer driving season ramps up refinery demand.
* Canadian crude has also benefited from U.S. sanctions on Venezuela and other countries, which is boosting demand for non-sanctioned heavy crude producers.
* Global oil prices fell by more than $1 a barrel on Wednesday as investors doubted that upcoming U.S.-China trade talks will result in a breakthrough, while hopes for an Iran-U.S. nuclear deal eased supply worries.
(Reporting by Amanda Stephenson in Calgary; Editing by Mohammed Safi Shamsi)