The discount on Western Canada Select crude oil to North American benchmark West Texas Intermediate futures widened on Friday.
WCS for September delivery in Hardisty, Alberta, settled at $14.75 a barrel below the U.S. benchmark WTI, according to brokerage CalRock, from $14.70 on Thursday.
* The discount remains significantly wider than it was in June, after traffic through the Strait of Hormuz picked up in July and also due to the ongoing weakness in China’s import appetite, which is hurting demand for heavy crude globally, analysts said.
* NoviLabs analyst Martin King said he expects the discount to widen more in the coming weeks, as Canada’s export pipelines are running mostly full and supply from oil sands operations tend to pick up in the fall each year after scheduled maintenance work is complete.
* “The demand for heavy oil for the paving season will be ebbing, taking some edge off heavy prices and widening the differentials,” King said, adding the supply of heavy Venezuelan crude into the U.S. Gulf Coast also remains strong, putting pressure on the WCS discount.
* Brent crude oil climbed more than $1 a barrel on Friday over ongoing uncertainty about the negotiations in progress that determine control of, and reopen, the key shipping artery of the Strait of Hormuz.
(Reporting by Amanda Stephenson in Calgary; Editing by Diti Pujara)