The discount on Western Canada Select to North American benchmark West Texas Intermediate futures grew on Wednesday to its widest point in 18 months as investors digested U.S. President Donald Trump’s deal to import up to $2 billion worth of Venezuelan crude.
WCS for February delivery in Hardisty, Alberta, settled at $14.45 a barrel below the U.S. benchmark WTI, according to brokerage CalRock, compared with $13.80 on Tuesday. It was the widest discount Canadian heavy crude has settled at since early July 2024.
An increase in Venezuelan barrels could compete with Canadian heavy oil, which is similar in quality, in the U.S. Gulf Coast over the longer term.
The threat has spooked the market, with Canadian oil sands stocks Cenovus Energy and Canadian Natural Resources down 5.5% and 8.8% respectively, year-to-date.
Analysts say there is potential for further WCS weakening in the months to come if Venezuela is able to rapidly ramp up oil production. But Canada remains partially sheltered due to its existing scale and infrastructure as well as rule-of-law advantage. Global oil prices settled lower for a second straight session on Wednesday, the same day Energy Secretary Chris Wright said the U.S. needs to control Venezuela’s oil sales and revenue indefinitely to stabilize that country’s economy and rebuild its oil sector.
(Reporting by Amanda Stephenson in Calgary; Editing by Tasim Zahid)