CALGARY — The discount on Western Canada Select crude narrowed this week as disruptions to oil supplies in the Middle East pushed global prices higher.
Western Canada Select, the benchmark for Canadian oil sands crude, was trading at about US$62.21 a barrel, up more than five per cent on the day, according to data from USCRWCAS.
Western Canada Select typically trades at a discount to the North American benchmark West Texas Intermediate because of differences in quality and transportation costs.
Earlier this week, brokerage CalRock said Western Canada Select for April delivery in Hardisty was trading at a discount of US$12.70 per barrel to West Texas Intermediate, compared with US$13.65 at the end of last week.
Global oil and gas prices surged following Israeli and U.S. strikes on Iran and retaliation by Tehran that disrupted energy infrastructure and shipping routes in the region.
Rory Johnston, founder of the Commodity Context newsletter, said supply concerns affecting crude shipments through the Strait of Hormuz are tightening global sour crude spreads and supporting prices for Canadian heavy barrels.
Much of the crude shipped through the Strait of Hormuz is graded medium to sour, similar to Canadian heavy oil.
According to brokerage CalRock, supply disruptions affecting those grades can strengthen demand for Canadian crude, including oil sands production.
Comments