Heavy discount narrows on final day of August trading

Canadian heavy crude’s discount narrowed to under $7 a barrel versus West Texas Intermediate (WTI) on Thursday, the final trading day the August trading cycle, as supplies have tightened traders said.Western Canada Select (WCS) heavy blend crude for August delivery in Hardisty, Alberta, traded at $6.55 per barrel below WTI after settling at $7 below WTI on Wednesday, according to NE2 Canada Inc.

“There is lack of crude here,” one Canadian crude trader said

In the first half of 2020, Canada’s production declined 20% from its 2019 average of 5.5 million barrels per day (bpd), the U.S. Energy Information Administration said on Thursday

EIA estimated that Canada’s production fell by 560,000 bpd to 4.4 million bpd in May, the lowest since mid-2016 and that production increased slightly in June, as demand for petroleum products in Canada and United States also increased

WCS prices have been supported this week on limited production gains, a tick higher in refinery runs and increased pipeline takeaway capacity, trade sources and analysts have said.

There were no trades reported for light synthetic crude from the oil sands for August delivery, after settling 90 cents under WTI on Wednesday.

Benchmark oil prices fell 1% on Thursday after OPEC+ agreed to ease record supply curbs and as new infections of the novel coronavirus continue to surge in the United States.