Western Canadian oil prices holding their own as production cuts kick in

By The Canadian Press
January 3, 2019 - 9:24am

CALGARY - Crude oil prices in Western Canada remain elevated as Alberta's government-mandated oil production curtailments come into force.

Calgary oil brokerage Net Energy says the difference between Western Canadian Select bitumen-blend heavy oil and New York-traded West Texas Intermediate oil prices was about US$12.50 per barrel on Wednesday afternoon.

That is an improvement over the US$17.52 per barrel average for spot contracts signed last month for January delivery.

The WCS-WTI discount peaked at more than US$52 a barrel in October but recovered to traditional norms or better after Premier Rachel Notley announced Dec. 2 that the province would impose curtailments of 325,000 barrels per day as of Jan. 1 on larger producers to relieve a glut of oil in Western Canada and free up export pipeline space.

Tom McMillan, a spokesman for oilsands producer Pengrowth Energy, says his company is complying with curtailments it was asked to make after using unspecified ``options'' provided by the government to reduce the impact.

He says better prices are helping Pengrowth and the province has been ``responsive'' in addressing his firm's concerns but he still hopes the cutbacks end as soon as possible.

CEO Andrew Phillips of PrairieSky Royalty, says the recovery in price has had a ``huge impact'' on his firm's bottom line and negative impacts have been negligible.

(The Canadian Press)


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