Alberta government’s decision to respond to the very low Canadian heavy oil prices with mandatory production cuts of 325,000 bpd has created a division among Canada’s oil industry. The government of Alberta has achieved its primary goal with the cuts—to lift the price of Western Canadian Select (WCS) and to help narrow the huge differential between WCS and WTI from late 2018. In recent weeks, the discount of WCS to WTI has been below US$15 a barrel, compared to more than a US$40 differential in the fall of 2018. The production cut in a free market like Canada, however, has drawn uneasy comparisons with the way OPEC intervenes on the global oil market to curtail production at times of glut or to ramp up oil supply when shortages are created or expected. While some Canadian companies, such as Cenovus Energy, have argued for all-round cuts across the industry, others—including […]