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(Reuters) – The discount on Western Canada Select to North American benchmark West Texas Intermediate futures narrowed again on Wednesday.
WCS for November delivery in Hardisty, Alberta, settled at $10.50 a barrel under the U.S. benchmark WTI, according to brokerage CalRock, compared to Tuesday’s close of $10.60.
- The WCS discount has grown steadily tighter this month. Wednesday’s settlement was the narrowest discount on Canadian crude since early July.
- Canadian crude oil production continues to rise. The oil-producing province of Alberta’s crude output was 4.2 million barrels per day in August, according to the Alberta Energy Regulator, the highest on record for that month.
- But the WCS discount has been well supported since the opening last year of the Trans Mountain pipeline expansion, which increased export capacity for Canadian oil.
- The Enbridge Mainline system — which transports oil from Alberta to various markets in Canada and the U.S. — is not apportioned for October due to less planned maintenance on the system. Apportionment is an industry term for when demand for pipeline space exceeds capacity.
- Oil prices edged up about 1% to a one-week high on Wednesday as traders expected a lack of progress on a Ukraine peace deal to keep sanctions in place against Moscow, while a weekly report showed growing U.S. oil consumption.
Reporting by Amanda Stephenson in Calgary; Editing by Shailesh Kuber
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