Heavy discount narrows to 11-year low on production cuts
Alberta oil well in canola fieldCanadian heavy crude’s discount versus the U.S. benchmark West Texas Intermediate (WTI) narrowed on Friday to an 11-year low. Western Canada Select (WCS) heavy blend crude for June delivery in Hardisty, Alberta, traded at $3.50 per barrel below WTI, according to NE2 Canada Inc, narrower than Thursday’s settle of $5.25 under. The intraday price is the lowest level recorded by NE2 in data that goes back to 2009. Supply cuts by Canadian producers are estimated by Canadian Natural Resources to be as high as 1 million barrels per day. The narrow differential reflects production curtailments, a Calgary trading source said. Data to last week showed refinery runs in Western Canada were up for the second week in a row but still down from runs in mid-March, analysts at Tudor, Pickering, Holt & Co said. Brent crude settled up $1.51, or 5.1%, at $30.97 a barrel while WTI crude futures gained $1.19, or 5%, to $24.74 a barrel.