Heavy discount narrows to fresh 2-1/2-month low

Canadian heavy crude’s discount versus U.S. benchmark West Texas Intermediate (WTI) crude narrowed on Wednesday to a fresh 2-1/2-month low, driven by dwindling inventories.Western Canada Select (WCS) heavy blend crude for March delivery in Hardisty, Alberta, was trading at $17.75 per barrel below WTI, according to NE2 Canada Inc, narrower than Tuesday’s settle of $18.50 under.

The discount was the smallest since mid-November.

Alberta oil inventories have shrunk since December as rail movement increased, industry sources said. Demand for heavy crude is also seen as strong.

Light synthetic crude from the oil sands traded at $4 below WTI, after settling on Tuesday at $4.20 under WTI.

Global oil prices jumped about 2% on media reports that suggested scientists were developing a vaccine for the fast-spreading coronavirus, even as world health experts said treatments have not yet been found.

Canada total crude oil exports rose 810,000 barrels per day to 4.14 million bpd in December – Statistics Canada.

Canada’s Federal Court of Appeal on Tuesday dismissed a challenge to the approval by Prime Minister Justin Trudeau’s government of the Trans Mountain oil pipeline expansion.

The proposed Enbridge Inc Line 3 pipeline replacement cleared a key hurdle on Monday with a Minnesota regulator.