Canada crude - Heavy oil strengthens, discount at 5-month low

Fri Mar 8, 2013 4:45pm EST

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* April WCS last at $19.50/bbl under WTI

* April synthetic bid/ask of $5.75/$7.00 above WTI

CALGARY, Alberta, March 8 (Reuters) - Canadian heavy crude prices continued to strengthen on Friday on speculation over lower supply due to oil sands project maintenance work.

Western Canada Select heavy blend for April delivery last sold for $19.50 per barrel under benchmark West Texas Intermediate, according to Shorcan Energy Brokers, the narrowest discount to WTI in more than five months. WCS settled on Thursday at $22.50 per barrel under the benchmark.

Prices for the blend have been rising steadily since January, when the discount topped $40 per barrel because of pipeline disruptions and refinery shutdowns.

Market sources said the recent strength came on rumors that Imperial Oil Ltd was carrying out maintenance at its 155,000 barrel per day Cold Lake oil sands project. A spokesman for Imperial said that the facility was operating normally.

There were no trades for light synthetic crudes from the oil sands on Friday. Synthetic for April delivery had a bid-ask range of $5.75-$7.00 per barrel above West Texas Intermediate. It settled on Thursday at $5.60 per barrel above the benchmark.

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