The discount on Canadian heavy crude widened versus U.S. benchmark West Texas Intermediate (WTI) crude on Tuesday, as stockpiles remained elevated due to transportation constraints.
“The train that derailed in Saskatchewan caused much damage to the track so it might take a few more days or even a week and a bit to get back into service … which might back some crude by rail potentially,” one trader said
Fires are still burning at the site where a Canadian Pacific Railway train derailed early Monday while hauling oil, but they are under control, CP and public safety officials said on Tuesday.
Western Canadian oil stocks had already climbed to a record-high 39 million barrels as of Nov. 29 due to a temporary outage of the Keystone oil pipeline and a strike by Canadian National Railway Co workers.
Western Canada Select (WCS) heavy blend crude for January delivery in Hardisty, Alberta, settled at $20.40 per barrel below WTI, according to NE2 Canada Inc, wider than Monday’s settle of $19.95 below.
Light synthetic crude from the oil sands ended the session $1.90 below WTI, compared with Monday’s settle of $1 below.
Benchmark oil prices inched up on Tuesday as OPEC’s deal with associated producers last week to deepen output cuts in 2020 continued to provide a floor for prices, but U.S.-China trade tensions clouded the demand outlook.