Western Canadian Select crude differentials to West Texas Intermediate widened to their weakest levels in over two years on Sept. 21, S&P Global Energy said in a statement on Monday, citing industry officials and Platts assessments.
extending a seven-day decline as refinery maintenance, full pipeline capacity and rising production weighed on the heavy crude market,
Platts assessed WCS at Hardisty, Alberta, at a $21.35-per-barrel discount to WTI, 35 cents wider than the previous day and the weakest since Dec. 4, 2023. Differentials at Cushing, Oklahoma, and Nederland, Texas, each widened by $1.25/bbl to discounts of $13/bbl and $12/bbl, respectively, their weakest since Feb. 8, 2023.
Greg Stringham, a former markets executive at the Canadian Association of Petroleum Producers, said planned work at refineries in Canada and the US Midwest is reducing demand for WCS.
Canadian refinery outages are expected to reach about 750,000 barrels per day in the week ending Sept. 25, Platts said. The Trans Mountain pipeline system is also operating near capacity, limiting its ability to absorb excess Western Canadian crude. Meanwhile, Western Canadian production is forecast to rise by about 255,000 b/d this year to 5.553 million b/d, according to S&P Global CERA analysts.
Competition for heavy crude on the US Gulf Coast has also increased, with Venezuelan heavy crude exports to the region reaching 12.2 million barrels in August, up sharply from a year earlier.