Heavy Oil Discount Narrows as TMX Starts Operating – Canadian Energy News, Top Headlines, Commentaries, Features & Events – EnergyNow

The discount on Western Canada Select (WCS) heavy crude versus the North American benchmark West Texas Intermediate (WTI) tightened on Wednesday, as commercial operations got underway on the long-anticipated Trans Mountain pipeline expansion (TMX):

* WCS for May delivery in Hardisty, Alberta, traded at $11.75 a barrel below WTI, according to brokerage CalRock, after closing at $12.20 a barrel below the benchmark on Tuesday.

* The Trans Mountain pipeline expansion project (TMX) began commercial operations on Wednesday, and tankers will be able to load at Westridge Marine Terminal in the Port of Vancouver by mid-May.

* TMX nearly triples the flow of crude from Alberta to the Pacific Coast to 890,000 barrels per day.

* Many analysts expect it will help tighten heavy crude differentials to less than $10 a barrel below WTI by removing export pipeline bottlenecks and forcing U.S. refiners to compete with global buyers for Canadian barrels.

* Cenovus Energy reported higher-than-expected first-quarter profit due to increased production and refinery throughput, and executives said the start-up of TMX would open up new markets.

* Global oil prices fell about 3% to a seven-week low on a surprise build in U.S. crude stocks, the prospect of a Middle East ceasefire agreement and as hopes faded for near-term U.S. interest rate cuts that could boost oil demand.

(Reporting by Nia Williams in British Columbia; Editing by Sonali Paul)

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