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(Reuters) – The discount on Western Canada Select crude oil to North American benchmark West Texas Intermediate futures widened on Tuesday.
WCS for March delivery in Hardisty, Alberta, settled at $14.80 a barrel below the U.S. benchmark WTI, according to brokerage CalRock, compared with $14.60 a barrel on Monday.
- The discount on Canadian heavy crude widened approximately $1 per barrel over the month of January in the wake of heightened market volatility caused by U.S. President Donald Trump’s stated goal to increase Venezuelan oil production.
- Investors are watching for the potential for an increase in Venezuelan barrels to compete with similar-in-quality Canadian heavy oil in the U.S. Gulf Coast over the longer term.
- The U.S. government is working to issue as early as this week a general license allowing companies to produce oil and gas in Venezuela, as Washington seeks to encourage expanded output in the OPEC nation since capturing its president, three sources close to the matter told Reuters.
- Oil prices climbed about 2% on Tuesday after the U.S. shot down an Iranian drone and armed boats approached a U.S.-flagged vessel in the Strait of Hormuz, stoking concerns that talks aimed at de-escalating U.S.-Iran tensions could be disrupted.
Reporting by Amanda Stephenson in Calgary; Editing by Krishna Chandra Eluri
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