WCS Discount Widens as China's Import Appetite Fades

The discount on Western Canada Select (WCS) crude oil to North American benchmark West Texas Intermediate (WTI) futures widened on Friday.

According to brokerage CalRock, WCS for September delivery in Hardisty, Alberta settled at $14.75 a barrel below the U.S. benchmark WTI, up from $14.70 on Thursday.

The widening discount is attributed to ongoing weakness in China's import appetite and higher supply of heavy crude globally.

NoviLabs analyst Martin King expects the discount to widen further in the coming weeks due to Canada's export pipelines running mostly full and increased supply from oil sands operations after maintenance work is complete.

The demand for heavy oil, particularly during the paving season, will ebb, which may take some pressure off heavy prices and widen differentials, King said.