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The discount on Western Canada Select crude oil to North American benchmark West Texas Intermediate futures widened again on Tuesday as U.S. crude closed at its highest since 2022.
WCS for May delivery in Hardisty, Alberta, settled at $16.65 a barrel below the U.S. benchmark WTI, according to brokerage CalRock, compared with $16.15 on Monday.
* The WCS differential has widened by $1.50 since last week, and is now trading at its steepest discount since early 2024.29dk2902l
* The widening is the result of the Iran war and the market’s belief that oil supplies will be tighter in the near term than down the road, which has caused the price of the North American benchmark WTI to soar, traders and analysts said.
* Typically WTI trades at a discount to Brent, but this has reversed in a market where barrels for earlier delivery command a higher price. The benchmark WTI contract is for May delivery while Brent is for June.
* “WCS is just along for the ride,” Enverus analyst Al Salazar said. “When it comes to differentials, it takes two to tango, and right now WTI is driving it and causing that differential to widen.”
* Oil prices settled mixed on Tuesday, with Brent down on worries that high energy prices could slow economic growth, while U.S. crude closed at its highest since 2022 ahead of U.S. President Donald Trump’s deadline for Iran to open the Strait of Hormuz.
(Reporting by Amanda Stephenson in Calgary; Editing by Anil D’Silva)
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