Heavy sour Canadian crude in Hardisty, Alberta, has narrowed its discount to Nymex crude futures on demand to fill a new pipeline and the anticipated restart of a major Indiana refinery.
The Western Canadian Select (WCS) Hardisty assessment narrowed to a $15.23/bl discount to the CMA Nymex WTI on 11 March, the smallest discount since August last year.
So far in the April Canadian trade cycle, WCS Hardisty has averaged around a $15.90/bl discount to the CMA Nymex, compared with an average of $19.17/bl below the basis in the March trade cycle.
Liquidity peaks during the roughly two-week period that runs from the first calendar day prior to the month of delivery until nominations are due for Enbridge's 3mn b/d mainline system, or 1-14 March in the current cycle.
Demand is rising as the operator of Canada's 590,000 b/d Trans Mountain Expansion (TMX) pipeline has called for 2.1mn bl of crude for April to fill the new line, with another 2.1mn bl requested for May, according to Canadian producer MEG Energy, a committed shipper on TMX.
Additionally, traders expect downstream demand to recover in April as BP's 435,000 b/d Whiting, Indiana, refinery heads towards a restart following a major power outage on 1 February. BP said on 4 March that it is continuing a "phased restart" of the plant.
Whiting is a major taker of heavy crude from Canada. The refinery imported 230,000 b/d of such quality crude on average in January-July last year, according to the EIA.
Heavy crude prices in the US have been steadier relative to crude futures.
The WCS Cushing assessment is so far averaging around a $7.20/bl discount to the CMA Nymex for April delivery, or about 15¢/bl stronger than March trade.
