Heavy discount narrows on final day of trading cycle

Canadian heavy crude’s discount versus West Texas Intermediate (WTI) narrowed on Wednesday, the last day of the monthly trading cycle.Western Canada Select (WCS) heavy blend crude for October delivery in Hardisty, Alberta, traded at $7.80 per barrel below WTI, according to NE2 Canada Inc. It settled on Tuesday at $8.05 under.

The tight spread reflects global tightness in heavy oil supplies as U.S. Gulf Coast refiners seek alternative supplies to replace declining output from Venezuela and Mexico, a Calgary industry source said.

Imperial Oil Ltd began restoring production at its 220,000-barrel-per-day (bpd) Kearl oil sands site in Alberta after Inter Pipeline restored service to its Polaris pipeline following a leak.

Light synthetic oil from the oil sands for October delivery traded at $1.75 below WTI, unchanged from Tuesday’s settle.

The Canadian physical crude trading cycle is most liquid in the first two weeks of each month until the day before notices of shipments are due for the Enbridge Inc Mainline.

Global oil prices rose for a second day, gaining on an unexpected decrease in U.S. crude inventories and as Hurricane Sally forced a swath of U.S. offshore production to shut.