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(Reuters) – The discount of Western Canada Select (WCS) heavy crude to the North American benchmark West Texas Intermediate futures (WTI) was unchanged on Monday, remaining within the historically tight range it has been trading at this spring.
WCS for June delivery in Hardisty, Alberta, settled at $9.15 a barrel under the U.S. benchmark WTI, according to brokerage CalRock.
- Canadian heavy crude has been trading at a tight discount in recent months in part due to the opening of the Trans Mountain pipeline expansion one year ago, which boosted the country’s oil export capacity. On average, WCS-WTI differentials have narrowed by $4, or 23%, over the past year, according to RBC Capital Markets.
- The tight WCS discount also reflects tighter U.S. sanctions on heavy crude-producing countries such as Venezuela, which is boosting demand for non-sanctioned heavy crude producers.
- Global oil prices fell by more than $1 a barrel on Monday to settle at multi-year lows, as an OPEC+ decision to expedite its output hikes stoked fears about rising global supply at a time when the demand outlook is uncertain.
Reporting by Amanda Stephenson in Calgary; Editing by Alan Barona
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