The discount on Western Canada Select to the North American benchmark West Texas Intermediate futures settled at $10.90 a barrel on Tuesday, its widest differential since March this year.
WCS for August delivery in Hardisty, Alberta, widened from $10.40 a barrel on Monday, according to brokerage CalRock.
* The differential between Canadian heavy crude and the U.S. benchmark has been wider in July than it was last month, when concerns about wildfires in Canada’s oil-producing regions led to a temporary tightening.
* A steeper discount for Canadian crude this time of year is typical as crude markets begin to look ahead to the end of the summer driving season and reduced road paving demand, said Rory Johnston, founder of the Commodity Context newsletter. Canadian heavy crude is used by U.S. refiners to produce asphalt.
* Canadian crude, especially barrels being exported off the country’s West Coast via the Trans Mountain pipeline expansion, is also facing more competition from OPEC+ barrels, said RBN Energy analyst Martin King.
* Still, pricing for Canadian crude remains historically strong, in part due to the opening last year of the Trans Mountain pipeline, which boosted the country’s oil export capacity to Asian markets.
* Global oil prices dropped by less than 1% on Tuesday, after U.S. President Donald Trump’s 50-day deadline for Russia to end the war in Ukraine and avoid sanctions eased concerns about any immediate supply disruption.
(Reporting by Amanda Stephenson in Calgary; Editing by Devika Syamnath)