Heavy discount widens as global prices rebound

Canadian heavy crude’s discount widened versus U.S. benchmark West Texas Intermediate (WTI) oil on Friday, as global prices rebounded.Western Canada Select (WCS) heavy blend crude for April delivery in Hardisty, Alberta, traded at $13 per barrel below WTI, according to NE2 Canada Inc, wider than Thursday’s settle of $12 under.

The differential had been narrower this week as global prices plunged, and net Canadian prices approached break-even levels for some producers, a trader said.

A drop-off of rail shipments is also being eyed as it may boost inventories and widen the differential.

Husky Energy on Thursday was the latest Canadian oil producer to cut 2020 spending and production, following Cenovus Energy and MEG Energy .

The heavy differential dipped to as little as $10.50 on Monday, the smallest since Aug. 21, 2019.

Light synthetic crude from the oil sands was trading at $2.25 below WTI after Thursday’s settle of $1 under.

Global oil prices rebounded modestly but were on track for their worst week since the 2008 global financial crisis after the coronavirus outbreak rocked the world economy while top exporter Saudi Arabia and its allies stepped up plans to flood the market with record levels of supply.