The discount on Western Canada Select crude oil to North American benchmark West Texas Intermediate futures widened slightly on Tuesday.
WCS for February delivery in Hardisty, Alberta, settled at $14.40 a barrel below the U.S. benchmark WTI, according to brokerage CalRock, compared with $14.35 a barrel on Monday.
The discount on Canadian heavy crude remains more than $1 wider than it was last month. The market is watching for the potential for an increase in Venezuelan barrels to compete with similar-in-quality Canadian heavy oil in the U.S. Gulf Coast over the longer term.
But some analysts have suggested the market thus far may have overreacted, given it will take years for Venezuela to significantly ramp up its oil production beyond current levels. Oil prices surged by more than 2% on Tuesday as the prospect of disruptions to Iranian crude exports overshadowed possible increased supply from Venezuela.
(Reporting by Amanda Stephenson in Calgary; Editing by Cynthia Osterman)