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Shares in Canadian crude producers soared in early trading Monday after the Alberta government announced it would impose a production cut of 325,000 barrels per day to deflate a supply glut. The reaction among equity traders mirrored a sharp improvement in the oil market. Throughout the fall, Alberta crude has traded at steep discounts to the North American benchmark, West Texas Intermediate, due to a huge buildup of inventory as production outstripped the capacity for pipelines to move oil out of the province. In trading on Monday morning, Western Canadian Select – the benchmark for heavy oil – traded at a discount of US$19.75 a barrel to compared WTI, according to Net Energy, a Calgary trading company. That’s down from US$28.80 a barrel on Friday; it had been as high as $40 earlier in the week. Bloomberg’s spot price for WCS is US$32.91 a barrel, up $10.98 from the previous close. West Texas Intermediate also climbed on news of the Alberta supply cut, gaining US$2.06 to $52.99 per barrel in early trading. Alberta Premier Rachel Notley announced Sunday night that oil companies must cut production by 8.7 per cent in January compared to September levels. She said the cuts […]
