NEW YORK—U.S. refiners are expected to buy more Canadian oil after the Biden administration ends releases from the Strategic Petroleum Reserve (SPR) this fall, traders said, adding this should boost the price of Canadian barrels at a time of tight global supply.
The coming end of SPR releases could shift market dynamics again in a year of high volatility following Russia’s invasion of Ukraine in February. In March the White House announced it would release 180 million barrels from the U.S. strategic reserve to help quell high prices.
The releases have weighed on the price of Western Canada Select (WCS), the benchmark Canadian heavy grade. That oil, because it has similar qualities to the sour crude that dominates U.S. reserves, has traded at around $20 a barrel below U.S. West Texas Intermediate (WTI) crude for much of the summer. In 2021 the average WCS discount was $12.78 a barrel, according to the Alberta Energy Regulator….