Heavy discount narrows as takeaway capacity improves

Canadian heavy crude’s discount narrowed versus West Texas Intermediate (WTI) on Tuesday as production rises have been limited and due to a rise in available pipeline capacity, traders said.Western Canada Select (WCS) heavy blend crude for August delivery in Hardisty, Alberta, traded at $6.85 per barrel below WTI after settling at $7.05 below WTI on Monday, according to NE2 Canada Inc.

“We see a combination of declines from non-oil sands barrels and modest declines from certain oil sands projects in tandem with a continued pickup in pipeline capacity additions contributing to a market that isn’t in need of rail to clear through either H2 2020 or H1 2021,” Tudor Pickering Holt & Co analysts said this week.

No deals were seen for light synthetic crude from the oil sands for August delivery. It settled on Monday at $1.50 under WTI.

Benchmark oil prices rose slightly on Tuesday as OPEC and its allies cut production by more than ag