Canadian crude prices weakened on the spot market as the front-month U.S. oil futures contract traded below the second month, indicating a near-term oversupply of oil.
West Texas Intermediate oil for November delivery on the New York Mercantile Exchange was cheaper than December for a third consecutive day, a situation known as contango, the longest such period since June 19, according to exchange data.
Western Canadian Select heavy oil declined by $1.50 a barrel against WTI to a $30.50 discount, according to Calgary oil broker Net Energy Inc. Syncrude, a light oil processed from Canadian oil-sands bitumen, lost 50 cents to a $10.75 discount.
WTI futures for November delivery fell $1.20 to $101.21 a barrel on the Nymex, settling at a 20-cent discount to the December contract.
U.S. crude oil inventories rose by 6.8 million barrels in the week through Oct. 4, the largest increase since September, the Energy Information Administration said last week. The EIA said it will have no further inventory reports until the U.S. government shutdown ends.
Bolstering supplies are production increases from both North Dakota and Canada. North Dakota production reached a record 911,242 barrels a day in August, according to preliminary data released today.
Canadian production is ramping up this month after upgraders in Alberta and Saskatchewan return from maintenance. Suncor Energy Inc. said last week that it completed work at its 240,000 barrel-a-day Upgrader 2. Production had been cut by between 50,000 to 60,000 barrels a day during the work, which began in early September.