Canadian heavy crude price weakens, as Notley ponders ending cuts
Prices for Canadian oil fell relative to U.S. futures as Alberta Premier Rachel Notley expressed hope her government would be able to back off mandatory production curtailments in April.
Heavy Western Canadian Select’s discount to West Texas Intermediate futures grew for a second day, widening 35 cents to $7.85 a barrel, according to data compiled by Bloomberg. Edmonton Mixed Sweet’s discount widened 75 cents to $3.25 a barrel and synthetic crude, a light oil produced in an upgrader from oil sands bitumen, traded at a 15 cent discount to futures versus a 60 cent premium Monday.
The original plan was to “take the foot off the gas, as it were, on the curtailment as we move out of winter production into April,” Notley told reporters in Calgary Tuesday. “We are still hopeful” that plan can be followed, she said.
Prices surged in December after the Alberta government announced that oil producers in the province would together have to cut output by 325,000 barrels a day starting this month and then extending the same volume of cuts into February.
The curtailments were announced to alleviate a local glut caused by rising production meeting a shortage of export pipelines. Western Canadian Select’s discount to futures shrank to $6.95 a barrel last Friday, the narrowest in almost 10 years, from as wide as $50 a barrel in October, the widest in at least 10 years.