The discount on Canadian heavy crude versus the West Texas Intermediate (WTI) benchmark widened on Monday, the first day of the new monthly trading window.
Western Canada Select (WCS) heavy blend crude for August delivery in Hardisty, Alberta last traded at $19.75 a barrel below WTI, according to NE2 Group, widening $1.35 from the previous settlement.
Canadian heavy crude has been under pressure in recent weeks due to the U.S. government’s Strategic Petroleum Reserve release, which has flooded the Gulf Coast market with sour crude and is crimping demand for Canadian barrels.
Reduced U.S. refining capacity has also cut demand for Canadian crude, said Bart Melek, TD’s global head of commodity markets strategy.
Light synthetic crude from the oil sands for August delivery settled at $8.80 a barrel over WTI.
Global oil prices rose as supply concerns driven by lower OPEC output, unrest in Libya and sanctions against Russia outweighed fears of a demand-sapping global recession.