The discount on Western Canada Select to the North American benchmark West Texas Intermediate futures narrowed on Wednesday.
WCS for August delivery in Hardisty, Alberta, was trading at $10.15 a barrel under the U.S. benchmark WTI, according to brokerage CalRock, compared to $10.25 a barrel on Tuesday.
* The WCS discount is wider than it was last month, when concerns about wildfires in Canada’s oil-producing regions led to a temporary tightening. Alberta’s crude oil output dropped to a two-year low in May, said RBN Energy analyst Martin King in a report, due to temporary wildfire curtailments at several oil sands sites as well as more routine maintenance work.
* Pricing for Canadian crude remains historically strong, in part due to the opening of the Trans Mountain pipeline expansion, which boosted the country’s oil export capacity to Asian markets.
* Summer and the return of road construction season are a seasonally strong time of year for Canadian heavy crude, which is used by U.S. refiners to produce asphalt. Demand for Canadian oil has also been boosted by U.S. sanctions on Venezuela and other countries, which is raising demand for non-sanctioned heavy crude.
* – Global oil prices were steady on Wednesday as investors weighed strong U.S. gasoline demand data and attacks on shipping in the Red Sea, while U.S. copper tariffs loomed.
(Reporting by Amanda Stephenson in Calgary; Editing by Diane Craft)