Shares in Cenovus, CNRL soar on news of Alberta crude production cuts

WATCH ABOVE: The journey to Sunday's announcement has been filled with ups and downs as the province grappled with uncertainty around oil. Julia Wong explains.

Shares in oilsands companies most likely to benefit from Alberta’s move to curtail crude production starting Jan. 1 are soaring in the wake of Sunday’s announcement by Premier Rachel Notley.

In early trading Monday morning, Cenovus Energy Inc. rose as much as 13 per cent over its Friday close to $11.11, while Canadian Natural Resources Ltd. rose as much as 16 per cent to $38.74.

Cenovus CEO Alex Pourbaix was the first oilsands CEO to call for the province to curtail production and on Sunday issued a statement commending the government for its “difficult but necessary” decision to try to repair Alberta’s “temporarily broken” oil market.

READ MORE: Suncor assessing impact of Alberta’s move to cut oil production 8.7% next year

The discount between Western Canadian Select bitumen-blend oil and New York-traded West Texas Intermediate was about US$21 per barrel on Monday morning, an improvement of about US$7 per barrel from Friday, according to Net Energy. WTI was up almost US$2 per barrel.

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WATCH BELOW: Premier Rachel Notley announced an 8.7 per cent cut in the production of raw crude oil and bitumen, starting in January.

Premier Rachel Notley announces short-term 8.7 per cent oil production cut
Premier Rachel Notley announces short-term 8.7 per cent oil production cut

Canada’s largest oil and gas company, Suncor Energy Inc., opposed the curtailments as an unnecessary market intervention, noting it is insulated from most price discounting due to its Canadian refining assets and firm pipeline contracts.

READ MORE: Alberta energy firms split on call for government-imposed oil production cuts

Its shares were up slightly Monday as it issued a statement saying its estimate of the impact of the provincial cuts will be provided when it issues its 2019 capital and production guidance.

The Alberta government announced a plan Sunday to impose oil production cuts starting in January to reduce output by 8.7 per cent or 325,000 barrels per day until the province’s glut of oil is cleared, with the curtailments continuing at a lower pace for the rest of 2019.

READ MORE: Rachel Notley says Alberta is ‘essentially giving oil away for free’ in Toronto speech

WATCH BELOW: Premier Rachel Notley talked about with the Alberta government is doing to address the price of oil on Sunday evening.

Premier Rachel Notley discusses medium-, long-term oil solutions
Premier Rachel Notley discusses medium-, long-term oil solutions
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