The discount on Canadian heavy crude narrowed versus U.S. benchmark West Texas Intermediate (WTI) crude on Tuesday, after the 590,000-barrel-per-day Keystone pipeline returned to operation following a leak last month in North Dakota.Western Canada Select (WCS) heavy blend crude for December delivery in Hardisty, Alberta, was trading at $19 per barrel below WTI, according to Net Energy Exchange, narrower than Friday’s settle of $21.40 below. The market was closed on Monday for a holiday.
At that level, moving crude by rail is economic and in line with the forward pricing curve, an industry source said.
Imperial Oil Ltd said on Tuesday that it was ramping up its current crude by rail movement due to improving economics.
TC Energy Corp has restarted the Keystone oil pipeline at a 20% pressure reduction after spilling more than 9,000 barrels in North Dakota two weeks ago, a U.S. regulator said on Tuesday.
Light synthetic crude from the oil sands traded at $1.60 below WTI, a slightly larger discount than Friday’s settle of $1.55 under.
The Canadian province of Alberta has in recent weeks loosened rules on mandatory oil curtailment, by allowing production above set levels if it moves be rail, and by exempting new conventional wells from the restrictions.
Oil prices steadied after rising about 1% on Tuesday following a speech from U.S. President Donald Trump that offered few new details about Washington’s trade talks with Beijing.