The discount on Western Canada Select (WCS) crude oil to North American benchmark West Texas Intermediate futures widened on Wednesday, as soaring global freight prices continue to put pressure on Canadian barrels re-exported off the US Gulf Coast.
WCS for November delivery in Hardisty, Alberta, settled at $25.15 a barrel below the US benchmark WTI, according to brokerage CalRock, compared with $24.95 on Tuesday. The discount remains more than $10 wider than it was at this point in last month’s trading cycle and remains wider than it has been since 2023.
* The cost to transport oil on tankers globally has hit record highs in recent weeks following attacks on ships since the US-Iran war began in late February
* That has made re-exporting Canadian heavy crude barrels from the US Gulf Coast cost-prohibitive, traders said, adding Canada’s main crude export pipelines are essentially full, leaving few options to absorb strong production coming out of the country’s oil sands region
* Rising volumes of Venezuelan crude being imported into the US Gulf Coast are also putting pressure on Canadian barrels
* Oil prices settled lower on Wednesday following a choppy session after the International Energy Agency agreed to speed up a release of oil stocks and prioritize diesel in a bid to curb record-high fuel prices as the Iran war squeezes global supplies.
(Reporting by Amanda Stephenson in Calgary; Editing by Diti Pujara)