Alberta Easing Oil Production Cuts as Canadian Prices Rise

With prices fetched by Alberta heavy oil on the rise, the provincial government Wednesday reduced mandatory production cuts to 250,000 b/d from the 325,000 b/d ordered on Dec. 2.

The Canadian counterpart to quotas set by the Organization of the Petroleum Exporting Countries has been “instrumental” in paring deep discounts inflicted on Alberta output, said a government statement.

The trademark Alberta heavy crude product, Western Canada Select (WCS), was trading at about 17% below the North American light oil benchmark West Texas Intermediate. At this time a year ago the discount, aka differential, in the Canadian industry was 43%.

The chief victim of deep discounts for Alberta heavy crude is Canada’s top user of natural gas, thermal oilsands production.

For February...