Heavy crude holds steady in narrow range

The Canadian heavy oil differential tightened slightly on Monday compared with benchmark U.S. oil futures:

Western Canada Select (WCS) heavy blend crude for May delivery in Hardisty, Alberta, last traded at $8.20 a barrel below WTI crude futures , narrowing marginally from Friday’s settle, according to Net Energy Exchange.

WCS prices have held strong at a relatively narrow discount throughout this month’s trade cycle so far, supported by demand for Canadian heavy crude barrels in U.S. markets.

Alberta government curtailments also are boosting prices. Oil companies are limited to producing 3.69 million barrels a day in May, and 3.71 million bpd in June.

Light synthetic crude from the oil sands for May delivery traded at $1.20 a barrel over U.S. crude futures, rising from Friday’s settle of 85 cents a barrel over WTI.

A Calgary-based industry source said synthetic was in strong demand among certain refiners, who are willing to pay a premium for it.

U.S. oil futures rose 2 percent to $64.40 a barrel on expectations that global supplies will tighten due to fighting in Libya, OPEC-led cuts and U.S. sanctions against Iran and Venezuela.

(Reporting by Nia Williams in Calgary, Alberta; Editing by Peter Cooney)

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