Canadian synthetic crude was steady on Friday, holding at a hefty premium to the West Texas Intermediate (WTI) benchmark, while the discount on Canadian heavy crude deepened slightly.
Light synthetic crude from the oil sands for April delivery last traded at $4.90 barrel above the West Texas Intermediate (WTI) benchmark, according to NE2 Canada Inc, unchanged from the previous day.
On outright basis Canadian synthetic crude was worth more than $120 a barrel, after global oil benchmarks surged to multi-year highs as Russia’s invasion of Ukraine intensified and oil buyers shunned barrels from the world’s second-largest exporter of crude.
North American refineries are short of light crude due to high demand, low inventories and maintenance on oil sands upgraders, which process bitumen into synthetic light crude.
One industry source said that shortage will intensify in May, with Canadian Natural Resources Ltd’s Horizon project and Suncor Energy’s U2 upgrader both scheduled to start turnarounds.
Western Canada Select heavy blend crude for April delivery in Hardisty, Alberta, last traded at $12.75 per barrel below the WTI benchmark, according to NE2 Canada Inc, widening from Thursday’s settle of $12.50 a barrel over WTI.
Refinery maintenance is weighing on demand for WCS right now, although that is set to flip in May as more oil sands projects undergo maintenance just as refinery demand returns, the industry source added.