CANADA-CRUDE-Discount on Western Canada Select narrows
On Tuesday, the discount between West Texas Intermediate and Western Canada Select futures (the North American benchmark) narrowed.
WCS for Hardisty, Alberta delivery in October settled at $11.20 per barrel below the U.S. benchmark WTI according to brokerage CalRock. This compares with a $11.40 discount on Monday.
* The discount on WCS was narrowest since late July. Discounts widened in August due in part to the shutdown of BP's 440,000-barrel-per-day refinery in Whiting, Indiana, which had been affected by flooding after a severe thunderstorm. This refinery is usually the largest buyer of Canadian crude.
* WCS discounts will not be as small in the second half as they were earlier this year. Western Canadian crude oil production is continuing to increase, and the oil-producing province Alberta set a record in July of 4.3 millions barrels per day. According to Enverus analyst Michael Berger the increased output will lead to a greater use of the country's pipelines for exports. The market will also be watching the third quarter earnings calls from oil sands majors in order to get a 2026 production forecast.
The global oil price rose on Tuesday, after Israel announced that it had launched a military offensive against Hamas leaders in Doha, the capital of Qatar. This is an extension of its long-running military campaign throughout the Middle East. (Reporting from Amanda Stephenson, Calgary; Editing and production by Richard Chang).
(source: Reuters)