The discount on Western Canada Select to the North American benchmark West Texas Intermediate futures settled Wednesday at its widest since March.
WCS for August delivery in Hardisty, Alberta, settled at $10.95 a barrel under the U.S. benchmark WTI, according to brokerage CalRock, compared with $10.90 a barrel Tuesday.
* The differential between Canadian heavy crude and the U.S. benchmark is the widest it’s been in four months, due to the return of more normal market conditions, analysts say. The discount had become extremely tight this spring after wildfires in Canada temporarily disrupted oil sands output at a time when a number of U.S. refineries were also down for maintenance.
* “We’re coming out of some of those supply outages, both planned and unplanned, so that rebound in supply is playing out in higher outbound pipeline flows, higher Canada-to-U.S. movements, and that’s pressuring WCS to some degree,” said Wood Mackenzie analyst Dylan White.
* Another sign of more normal market conditions returning is a rebound in crude oil exports off Canada’s West Coast via the Trans Mountain pipeline, White said. The pipeline’s export volumes had dipped throughout the second quarter, but appear to be increasing again as Western Canadian supply stabilizes.
* Global oil prices settled marginally lower on Wednesday as U.S. fuel inventory builds and concerns about wider economic impact from U.S. tariffs outweighed some signs of increasing demand.
(Reporting by Amanda Stephenson in Calgary; Editing by Mohammed Safi Shamsi)