(Reuters) - The Canadian heavy oil discount widened on Monday against the West Texas Intermediate (WTI) benchmark, as bulging crude stockpiles in Alberta weighed on prices and reversed part of a recent narrowing of the price spread.
The discount had been shrinking modestly in the past week due to additional railway volumes. However, these shipments have not meaningfully reduced the supply overhanging the market, a Calgary-based trader said.
Western Canada Select (WCS) heavy blend crude for April delivery in Hardisty, Alberta, settled at $25.50 a barrel below the WTI benchmark crude price CLc1, according to Shorcan Energy brokers, compared with Friday’s settle of $24.35.
Expanding oil production in Alberta combined with tight transport capacity have caused the supply buildup and a bigger-than-usual WCS discount.
Light synthetic crude from the oil sands for April delivery last traded at $2.35 over WTI, a bigger premium than Friday’s settle of $2.05 over WTI.
Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Jonathan Oatis