"Canadian crude has become the most discounted oil on the planet," and the country now finds itself in the position of being the high cost producer in a world awash in oil, The Globe and Mail's Barrie McKenna writes.
Western Canadian heavy crude collapsed to as low as ~$12/bbl this morning, with the spread vs. the WTI North American benchmark climbing to $40/bbl in recent months, up from a typical spread of $15, costing Canada's economy tens of billions of dollars.
Producers including Canadian Natural Resources (NYSE:CNQ) and Cenovus Energy (NYSE:CVE) have responded by curtailing as much as 140K bbl/day or more in production, according to company statements, and are begging Alberta’s government to order production cuts across the province to boost prices.
Canada produced a record 4.2M bbl/day of oil in 2017 and is forecast to rise to 6.2M bbl/day by 2035, but "today's rock-bottom prices are a warning that the industry may never get there, and that the oil sands' best days are already in the rear-view mirror," McKenna says.
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