Heavy discount hits new low on production cuts
Alberta oil well in canola fieldCanadian heavy crude’s discount versus the U.S. benchmark West Texas Intermediate (WTI) narrowed on Monday to an 11-year low. Western Canada Select (WCS) heavy blend crude for June delivery in Hardisty, Alberta, traded at $3 per barrel below WTI, according to NE2 Canada Inc, narrower than Friday’s settle of $3.45 under. The intraday price is the lowest recorded by NE2 in data that goes back to 2009. Canada, the world’s fourth-largest oil producer, has shut in 644,000 barrels per day, according to Eight Capital, among the highest in the world and 13% of February’s production. There were 23 active drilling rigs in Western Canada as of last week, down from 69 in the same week a year ago and below the 2016 trough of 38 rigs, analysts at Tudor, Pickering, Holt & Co said. Brent crude futures lost 4.4% to settle at $29.63 a barrel. WTI crude fell 60 cents, or 2.4%, to settle at $24.14 a barrel.