Heavy crude discount narrows even as Keystone shutdown continues

Western Canada Select (WCS) crude’s discount to the benchmark West Texas Intermediate (WTI) tightened on Friday, despite the Keystone pipeline remaining shut down because of a leak:

TC Energy shut its 622,000 barrel-per-day Keystone pipeline, crimping the flow of Canadian oil to U.S. refineries, after a spill into a Kansas creek on Wednesday night.

On Friday, TC said it is still determining when Keystone can return to service. Officials from the U.S. Environmental Protection Agency said oil removal efforts were likely to extend into next week.

WCS heavy blend crude for December delivery in Hardisty, Alberta, traded at $27.70 a barrel under WTI, according to a Calgary-based broker, having settled at $28.45 a barrel under the benchmark the previous day.

WCS for January delivery traded between $28.00 and $27.50 a barrel under WTI, little changed from the previous day when it settled at $28 a barrel under the benchmark.

Global oil prices settled lower in volatile trading, with both benchmarks recording their biggest weekly declines in months, as growing recession fears negated any supply woes after weak economic data from China, Europe and the United States. (Reporting by Nia Williams; Editing by Maju Samuel)