The discount on Western Canada Select to North American benchmark West Texas Intermediate futures widened again on Thursday for its third straight trading session, as developments in Venezuela continue to rattle crude markets.
WCS for February delivery in Hardisty, Alberta, settled at $15 a barrel below the U.S. benchmark WTI, according to brokerage CalRock, compared with $14.45 on Wednesday. Thursday’s settlement marks the steepest discount Canadian heavy crude has traded at since July 2024, with weakness driven overwhelmingly by U.S. Gulf Coast pressure, said Commodity Context founder Rory Johnston.
While the widening is being driven partly by typical seasonal patterns, it has also coincided with the U.S. capture of Venezuelan President Nicolas Maduro and the announcement of U.S. President Donald Trump’s deal to import up to $2 billion worth of Venezuelan crude.
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.
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 climbed over 3% on Thursday after two successive days of declines, settling at a two-week high as investors assessed developments in Venezuela and worried about supplies from Russia, Iraq and Iran.
(Reporting by Amanda Stephenson in Calgary; Editing by Alan Barona)