Canadian heavy crude’s discount versus West Texas Intermediate (WTI) widened on Wednesday, but remained at tight levels on low inventories and recovering demand.
Western Canada Select (WCS) heavy blend crude for November delivery in Hardisty, Alberta, traded at $9.65 per barrel below WTI, according to NE2 Canada Inc. It settled on Tuesday at $9.30 under.
The tight differential level is surprising, given that oil sands turnarounds are wrapping up and demand is seasonally weaker, said Matt Murphy, upstream analyst at Tudor Pickering Holt & Co.
Insufficient supply of heavy oil for U.S. Gulf refiners, along with low Western Canadian inventories are supporting prices, Murphy said.
Light synthetic oil from the oil sands for November delivery traded at $2.90 below WTI, narrower than Tuesday’s settle of $3.25 under.
Alberta’s oil output is 16% below pre-COVID levels, provincial Energy Minister Sonya Savage said.
Global oil prices strengthened as equities also rose and the dollar traded lower, even as concerns loomed that recovery in fuel demand will be stalled by soaring global coronavirus cases. 29dk2902l