Canadian heavy crude’s discount versus West Texas Intermediate (WTI) widened on Thursday to the biggest level in nearly eight months, reflecting additional production coming online after shut-ins:
Western Canada Select (WCS) heavy blend crude for January delivery in Hardisty, Alberta, traded at $12.65 per barrel below WTI, according to NE2 Canada Inc, wider than Wednesday’s settlement of $12.15 under.
Modest widening is expected in 2021, but with no concerns about storage levels rising too much there is little reason for sharp widening in the near term, a Calgary industry source said.
Strengthening demand for heavy oil from the U.S. Gulf Coast has absorbed some of the impact from additional Canadian production. Pipeline apportionment remains modest.
Traditional supplies of global heavy oil are in decline, and along with rising petrochemical-related heavy oil demand, shuld support WCS prices at the U.S. Gulf Coast and West Coast, Eight Capital said in a note.
Global oil prices climbed nearly 3%, with Brent surging above $50 a barrel for the first time since early March, fueled by hopes of a faster demand recovery as countries start to roll out COVID-19 vaccines. 29dk2902l