Canadian heavy crude’s discount narrowed versus West Texas Intermediate (WTI) on Tuesday as production rises have been limited and due to a rise in available pipeline capacity, traders said.
Western Canada Select (WCS) heavy blend crude for August delivery in Hardisty, Alberta, traded at $6.85 per barrel below WTI after settling at $7.05 below WTI on Monday, according to NE2 Canada Inc.
“We see a combination of declines from non-oil sands barrels and modest declines from certain oil sands projects in tandem with a continued pickup in pipeline capacity additions contributing to a market that isn’t in need of rail to clear through either H2 2020 or H1 2021,” Tudor Pickering Holt & Co analysts said this week.
No deals were seen for light synthetic crude from the oil sands for August delivery. It settled on Monday at $1.50 under WTI.
Benchmark oil prices rose slightly on Tuesday as OPEC and its allies cut production by more than agreed to in June, although demand concerns lingered due to increased cases of COVID-19 in the United States.