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Heavy Western Canadian Select crude fell to a record low as several oil producers shut in production and some demand the Alberta government intervene to mandate across-the-board cuts.
The oilsands benchmark fell US$2.29 to US$13.46 a barrel at 1:57 p.m. Calgary time Thursday, the lowest in Bloomberg data extending back to 2008. The price broke a previous record set in early 2016, when West Texas Intermediate crude futures were trading under US$30 a barrel amid a world-wide supply glut.
The price collapse comes as pipeline bottlenecks in Western Canada constrain exports just as WTI experienced a record losing streak amid rising U.S. stockpiles and projections for reduced demand.
Producers including Canadian Natural Resources Ltd. and Cenovus Energy Inc. have responded to the price drop by curtailing what could amount to as much as 140,000 barrels a day or more, according to company statements. Some operators have gone further, asking that Alberta’s government mandate production cuts across the province.
Western Canadian Select at Hardisty, Alberta, traded at US$43-a-barrel discount to WTI Thursday, US$2.50 wider than on Wednesday, data compiled by Bloomberg show.
–With assistance from Kevin Orland.
Bloomberg.com
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