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(Reuters) – The discount on Western Canada Select to the North American benchmark West Texas Intermediate futures narrowed on Tuesday.
WCS for July delivery in Hardisty, Alberta, settled at $9.15 a barrel under the U.S. benchmark WTI, according to brokerage CalRock, compared with $9.20 a barrel in Monday’s trade.
- 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 to Asian markets, including China.
- WCS typically sees seasonal strength this time of year as the return of summer driving season ramps up refinery demand.
- Canadian crude has also benefited from U.S. sanctions on Venezuela and other countries, which is boosting demand for non-sanctioned heavy crude producers.
- Global crude markets have been volatile since Friday, when oil prices surged more than 7% after Israel began bombing Iran over claims Tehran was close to securing an atomic bomb.
- Global oil prices climbed over 4% on Tuesday as the Iran-Israel conflict raged with no end in sight, though major oil and gas infrastructure and flows have so far been spared from substantial impact.
Reporting by Amanda Stephenson in Calgary; Editing by Sahal Muhammed
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