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(Reuters) – The discount on Western Canada Select to North American benchmark West Texas Intermediate futures narrowed slightly on Thursday.
WCS for December delivery in Hardisty, Alberta, settled at $11.65 a barrel below the U.S. benchmark WTI, according to brokerage CalRock, down from $11.70 on Thursday.
- Canadian crude storage levels remain below the five-year average, said Enverus analyst Michael Berger. The Trans Mountain pipeline system, which exports Canadian crude to U.S. and Asian markets via the Pacific coast, is not apportioned for November, another factor supporting the tight differential. Apportionment is an industry term for when demand for pipeline space exceeds capacity.
- But Berger said it’s more difficult to forecast the WCS discount in the longer-term, given the potential for policy and regulatory changes in Canada that could encourage oil producers there to increase production.
- Global oil prices settled more than 2% higher on Friday as Russia’s port of Novorossiisk halted oil exports following a Ukrainian drone attack that hit an oil depot in the Russian energy hub, stoking supply concerns.
Reporting by Amanda Stephenson in Calgary; Editing by Tasim Zahid
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