Heavy discount hits new low on production cuts

Canadian 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.