Heavy discount narrows on slow pace of restoring output

Canadian heavy crude’s discount versus West Texas Intermediate (WTI) narrowed on Friday, as a slow pace of reversing production cuts supported prices.Western Canada Select (WCS) heavy blend crude for September delivery in Hardisty, Alberta, traded at $9.60 per barrel below WTI, according to NE2 Canada Inc. It settled the previous day at $9.85 under.

A significant volume of heavy oil production capacity remains offline, lending support to prices, an industry source said.

Demand from refiners is slowly increasing and pipelines are running modestly below capacity, adding to the narrowing trend.

Global oil prices edged lower as investors feared demand would recover more slowly than expected from COVID-19 pandemic lockdowns, while rising supply also overshadowed optimism over falling crude and fuel inventories.