Discount on Western Canada Select Narrows

(Reuters) – The discount on Western Canada Select to North American benchmark West Texas Intermediate futures narrowed on Friday.

WCS for January delivery in Hardisty, Alberta, settled at $12.80 a barrel below the U.S. benchmark WTI, according to brokerage CalRock, compared with $13.20 on Thursday.

• After spending much of the year in the $9-$11 range, in large part due to the Trans Mountain pipeline expansion, which has given Canadian oil producers additional export capacity, the WCS discount has recently widened.
• The widening can be attributed in part to rising Canadian production growth that has increased pressure along the country’s export pipelines, as well as normal seasonal patterns.
• In spite of recent widening, the discount on Canadian heavy crude remains tight from a historical perspective.
• Global oil prices fell on Thursday as investors focused on Russia-Ukraine peace talks and eyed large surpluses in U.S. gasoline and diesel inventories.

Reporting by Amanda Stephenson in Calgary; Editing by Alan Barona

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