Canada crude-Heavy spread shrinks to smallest in 5 months
* May WCS quoted at $16.50/bbl under WTI
* Hardisty inventories more than halved since Dec
* Enbridge sets 11 pct apportionment on 2 pipelines
CALGARY, Alberta, March 21 (Reuters) - The discount on Canadian heavy crude oil shrank to its smallest in more than five months on Thursday on dwindling inventories in Alberta and reduced overall rationing of Enbridge Inc's pipeline network, market sources said.
Western Canada Select heavy blend for May delivery last sold for C$16.50 a barrel under benchmark West Texas Intermediate, compared with a Wednesday settlement of C$18.25 under WTI, according to Shorcan Energy Brokers.
That was the tightest differential since Oct. 17.
It is a far cry from discounts for WCS that topped $40 a barrel early this year due to a combination of tight pipeline capacity, refinery outages and surging crude production.
At least some of the recent strength is due to falling inventories at the pipeline and storage hub at Hardisty, Alberta, a trader said.
According to Genscape, crude volumes at Hardisty fell to 6.39 million barrels on March 15, down 13 percent from the previous week. Hardisty inventories topped 11 million barrels in early December.
Meanwhile, Enbridge said this week it set 11 percent apportionment on Lines 5 and 6B in the U.S. Midwest portion of its pipeline network for April. That compared with month-earlier apportionment figures of 8 percent for Line 5 and 37 percent for Line 6B.
There were no quotes on Thursday for light synthetic crude for May, though the active trade period does not begin until April 1. Synthetic settled on Wednesday at $2.50 a barrel above WTI.