Heavy Canadian crude’s discount to U.S. benchmark futures narrowed to the smallest since April as crude-by-rail shipments were forecast to increase.
Western Canadian Select, an oil sands benchmark, strengthened to a $9.10 discount on Wednesday, data compiled by Bloomberg show. The gap has narrowed $4.15 this month, with $1.30 shed on Tuesday. Prices are closing in on West Texas Intermediate futures after Canadian Pacific Railway Ltd. said crude-by-rail volumes were expected to rise 20% in the third quarter from about 160,000 barrels a day in the second quarter.
The heads of Canadian oil companies including Cenovus Energy Inc. and Suncor Energy Inc. are offering to boost crude-by-rail shipments in exchange for higher production limits.