Canadian heavy crude’s discount versus West Texas Intermediate (WTI) narrowed slightly on Friday, as prices were supported by a pipeline leak’s impact on oil production.
Western Canada Select (WCS) heavy blend crude for October delivery in Hardisty, Alberta, traded at $8.75 per barrel below WTI, according to NE2 Canada Inc. It settled the previous day at $9 under.
Imperial Oil Ltd this week shut all production at its 220,000-barrel-per-day (bpd) Kearl oil sands site in Canada due to an outage of part of the Polaris pipeline in Alberta following a spill.
The pipeline outage is mostly factored into the heavy differential now, but any update on the timing of restarting it may sway the market, a Calgary-based trader said.
Canadian oil sands companies have been restoring production that had been shut in after the coronavirus pandemic spread and curbed demand from refineries.
Light synthetic oil from the oil sands for October delivery traded at $2.20 below WTI, a tad narrower than the previous day’s settle of $2.25.
Global oil prices fell more than 3% and posted their biggest weekly decline since June as fears of a slow economic recovery from the COVID-19 pandemic compounded worries about weak oil demand.