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Suncor Energy’s Fort Hills oilsands project. Image: Joey Podlubny/JWN The Western Canadian Select heavy oil price is rising significantly as U.S. refining maintenance is complete, rail volumes pick up and the market responds to Alberta’s oil production curtailment plan. Since Canada’s top oil-producing province announced mandatory output curbs on Dec. 2, the WCS spot price has surged more than 70 percent. The grade’s discount to the U.S. benchmark has been chopped in half to around $13/bbl, the narrowest in more than a year. Oil producers are saying the 8-day-old plan will bring “significant relief” to the province’s pipeline congestion problem, and it’s even being credited with preventing layoffs for at least one major oilsands company. The 325,000-bbl/d supply cut takes effect next month. “It’s working — the proof is in the price,” said Tim Pickering, chief investment officer of Auspice Capital Advisors Ltd. in Calgary. “The amount of the curtailment was enough to make a measurable difference in the glut that we have.” The plan announced by Alberta Premier Rachel Notley probably has encouraged producers to start dialing back output because they know they can do so without putting themselves at a disadvantage to rivals, Pickering said. As oil […]
