Heavy crude differential narrows

Railcars holding crude oil

Canadian heavy crude’s discount to West Texas Intermediate (WTI) narrowed on Friday.

Western Canada Select (WCS) heavy blend crude for October delivery in Hardisty, Alberta last traded at $11.65 per barrel below the WTI benchmark, according to NE2 Canada Inc. That was narrower than Thursday’s settlement of $11.90.

Strong refining margins and a drawdown in Canadian oil inventories have supported prices, an industry source said.

Traders have said the market is also supported by increased capacity on Enbridge Inc’s Line 3 pipeline, which is due to start shipping 620,000 barrels per day in October.

Light synthetic crude from the oil sands for October delivery last traded at $1.40 per barrel below WTI, narrower than Thursday’s settlement of $1.45 a barrel below the benchmark.

Global oil prices rose, supported by growing signs of supply tightness in the United States as a result of Hurricane Ida and as U.S.-China trade hopes gave riskier assets a boost.

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