The discount on Western Canada Select (WCS) heavy crude versus the North American benchmark West Texas Intermediate (WTI) traded steady on Wednesday.
WCS for April delivery in Hardisty, Alberta began trading at $15.80 per barrel below WTI and then traded between $16 and $15.75 under WTI, according to brokerage CalRock. WCS had traded between $15.90 and $15.75 per barrel below the U.S. benchmark on Tuesday.
Decreasing Alberta oil storage levels, demand building for the coming asphalt season and optimism about the Trans Mountain pipeline expansion coming online in spring have reduced discounts, an industry source said.
Alberta oil sands production dropped 350,000 barrels per day in December from the previous month, according to ARC Energy Research and Alberta Energy Regulator data.
Pipeline operator Enbridge expects Western Canadian oil production to grow by 500,000 barrels per day through 2025.
Global oil futures edged up about 1% on a smaller-than-expected build in U.S. crude inventories, a big withdrawal from distillate and gasoline stocks and remarks by the U.S. Federal Reserve chief that he still expects interest rate cuts this year.
(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Shounak Dasgupta)