Heavy discount narrows, new trading cycle begins

Canadian heavy crude’s discount narrowed versus West Texas Intermediate (WTI) on Thursday, the beginning of a new monthly trading cycle.Deep curtailments and ample space in storage and pipelines have compressed differentials, traders say.

Western Canada Select (WCS) heavy blend crude for August delivery in Hardisty, Alberta, traded at $8.70 per barrel below WTI, according to NE2 Canada Inc, narrower than Tuesday’s settle of $10.35 under.

Tight Canadian price differentials are contributing to some previously shut-in volumes coming back online, Haywood Capital Markets said in a note.

Light synthetic crude from the oil sands for August delivery traded at $3 under WTI, after Tuesday’s settle of $4.50 under.

Global oil prices gained more than 2%, supported by a drop in U.S. unemployment and a drawdown in crude inventories.

Canada’s Supreme Court removed an obstacle to expansion of the Trans Mountain oil pipeline, dismissing an appeal of a lower court decision that had backed Ottawa’s approval of the project.

Canadian pipeline operator Enbridge Inc can restart operations at the west leg of its Line 5 pipeline while the damaged east leg remains shut, a Michigan circuit court judge ruled on Wednesday.