The discount on Western Canada Select (WCS) to the North American benchmark West Texas Intermediate (WTI) futures narrowed on Friday.
WCS for July delivery in Hardisty, Alberta, settled at $8.85 a barrel under the U.S. benchmark WTI, according to brokerage CalRock, after having settled at $9.10 under the U.S. benchmark on Thursday.
* Global crude prices rose more than $1 a barrel on Friday, posting their first weekly gain in three weeks after a favorable U.S. jobs report and resumed trade talks between the U.S. and China, raising hopes for growth in the world’s two largest economies.
* Stronger U.S. demand means higher U.S. refinery runs and boosts demand for Canadian heavy crude, said Rory Johnston, energy analyst and founder of the Commodity Context newsletter.
* The WCS discount had narrowed early in the week as wildfires burning in Canada’s oil-producing province of Alberta prompted several oil sands operations to evacuate workers as a precaution. About 344,000 barrels per day of production, or about 7% of Canada’s average daily crude production, was disrupted as a result.
* But concerns about long-term supply impacts appeared to lessen mid-week. Canada’s largest crude producer, Canadian Natural Resources, restarted operations at its Jackfish 1 site and analysts said they expect Cenovus Energy’s Christina Lake oil sands site to also resume full operations soon. However, Cenovus has not yet confirmed when it will restart Christina Lake production.
(Reporting by Amanda Stephenson in Calgary; Editing by Alan Barona)