(Bloomberg) -- The discount on Canadian heavy crude is the most stable it has been in more than two years as the startup of the expanded Trans Mountain pipeline gives the country’s oil producers new shipping options and a broader pool of buyers.
Western Canadian Select’s discount to US benchmark West Texas Intermediate has changed an average of less than 10 cents a barrel per day for each month from July onward, according to General Index prices. That’s the longest period of such stability since the first four months of 2022.
The differential had moved by an average of as much as $1 a day in the past as a dearth of pipeline space forced some Canadian producers to sell their oil at steep discounts. But since starting operation in May, the expansion of Trans Mountain — which involved adding a new line alongside an older conduit — has provided oil companies with a surplus of pipeline space and access to new markets in Asia and on the US West Coast.
Trans Mountain has also driven down a form of rationing known as apportionment on other export pipelines, such as Enbridge Inc.’s Mainline, to between zero and low single-digit percentages from 30% or more in the past.
There are signs the stability for Canadian crude prices may last. The surplus of pipeline space means the expanded Trans Mountain won’t be full until 2028, Mark Maki, chief executive officer of the government-owned Trans Mountain Corp., told a House of Commons committee recently.
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