The discount on Western Canada Select crude oil to North American benchmark West Texas Intermediate futures widened on Tuesday.
WCS for December delivery in Hardisty, Alberta, settled at $31.60 a barrel below the US benchmark WTI, compared with $31.10 on Monday, according to brokerage CalRock. The discount is now more than double what it was in September and is at its widest since 2018.
* Steep discounts on Canadian heavy crude have historically been a result of a lack of pipeline capacity out of the Western Canadian Sedimentary Basin.
* This time, the widening is being driven in part by surging freight rates globally caused by ongoing disruptions in the Middle East, as well as refinery maintenance in the US.
* Crude supply out of Canada continues to grow in 2026, said Wood Mackenzie analyst Dylan White, adding Canadian pipeline volumes hit an all-time record in late October.
* “And then of course, as all of this is going on, you also have increased competition from Venezuela,” White said.
* The WCS discount has a reasonable chance of narrowing in the months to come, especially if freight rates ease, but will likely remain wider than 2025 levels, he said.
* Oil prices eased about 1% on Tuesday to the lowest in nearly four weeks, as the market weighed talks to end the wars in Ukraine and Iran against worries that recent attacks in both conflicts could further disrupt supplies.
(Reporting by Amanda Stephenson in Calgary; Editing by Leroy Leo)