The discount on Western Canada Select crude oil to North American benchmark West Texas Intermediate futures narrowed on Thursday.
WCS for July delivery in Hardisty, Alberta, settled at $12.10 a barrel below the U.S. benchmark WTI, according to brokerage CalRock, compared with $12.40 a barrel on Wednesday.
* The WCS differential has been volatile with WTI’s swings since the start of the Iran conflict.
* But the underlying demand for WCS barrels has remained strong, said RBN Energy analyst Martin King, pointing to Western Canadian export pipelines that are full or nearly full and crude inventories in Alberta that are at their lowest point for this time of year since 2017.
* The WCS discount should remain narrow for the remainder of the year, King said, given the growing expectations that it will take a long time to resolve the Strait of Hormuz closure. “This should help to keep a very solid bid under Canadian barrels,” he said.
* Oil prices settled around 3% lower on Thursday on investor hopes for an end to the U.S.-Israeli war with Iran that could reopen the Strait of Hormuz, following a ceasefire deal between Israel and Lebanon.
(Reporting by Amanda Stephenson in Calgary; Editing by Arun Koyyur)