The discount on Western Canada Select to North American benchmark West Texas Intermediate futures continued its widening trend on Wednesday, reaching its broadest point since February.
WCS for January delivery in Hardisty, Alberta, settled at $13.75 a barrel below the U.S. benchmark WTI, according to brokerage CalRock, compared to $13.55 on Tuesday.
* After spending much of the year in the $9-$11 range, in large part due to the Trans Mountain pipeline expansion which has given Canadian oil producers additional export capacity, the WCS discount has recently widened.
* The widening can be attributed to rising Canadian production growth that has increased pressure along the country’s export pipelines, said Wood Mackenzie analyst Lee Williams, who pointed to rising levels of apportionment on Enbridge’s Mainline during both November and December. Apportionment is an industry term for when pipeline demand exceeds capacity.
* A strong rebound in U.S. crude runs since the second half of November has likely supported this strong corridor utilization as well, Williams said.
* Global oil prices settled higher on Wednesday after officials said the U.S. seized an oil tanker off the coast of Venezuela, adding to concerns about immediate supplies.
(Reporting by Amanda Stephenson in Calgary; Editing by Krishna Chandra Eluri)