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(Reuters) – The discount on Western Canada Select to North American benchmark West Texas Intermediate futures narrowed on Thursday.
WCS for November delivery in Hardisty, Alberta, settled at $11 a barrel under the U.S. benchmark WTI, according to brokerage CalRock, compared to Wednesday’s close of $11.10.
- A spokesperson for Canadian pipeline operator Enbridge said Thursday the company’s Mainline system — which transports oil from Alberta to various markets in Canada and the U.S. — is not at apportionment in October. Apportionment is an industry term for the rationing that occurs when demand for pipeline space exceeds capacity.29dk2902l
- The increase in seasonal capacity this month on the Mainline is due to less planned maintenance on the system, the Enbridge spokesperson said.
- Greater capacity on the Mainline this month means there is room for additional production growth from Alberta’s oil sands without a corresponding widening in the WCS discount, said RBN Energy analyst Martin King.
- Western Canadian crude production continues to grow, with the oil-producing province of Alberta hitting a new record of 4.3 million barrels per day in July.
- Demand was strong in September for Canadian crude loaded off the Trans Mountain pipeline, which carries Alberta oil to the B.C. coast for export overseas, and that trend will likely continue in October, King said.
- Global oil prices fell about 2% to their lowest in four months on Thursday, extending a run of declines into a fourth day, due to concerns about oversupply in the market ahead of a meeting of the OPEC+ group over the weekend.
Reporting by Amanda Stephenson in Calgary; Editing by Sahal Muhammed
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