Alberta’s oil-production curtailment plan has largely accomplished its mission — even before it has gone into effect. Since Canada’s top oil-producing province announced mandatory output curbs on Dec. 2, the spot price of Western Canada Select crude has surged more than 70 per cent. The grade’s discount to the U.S. benchmark has been chopped in half to around USUS$13 a barrel, the narrowest in more than a year. Other blends, including Edmonton Mixed Sweet and Syncrude, also are surging. 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 oil-sands company. The 325,000-barrel-a-day 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 dialling back output because they know they can do so without putting themselves at a disadvantage to rivals, Pickering said. As oil suppliers and refiners negotiate […]
