As oil prices dropped to unprecedented negative levels Monday, experts say it's the result of an oversupply problem due to COVID-19 stay-at-home orders.

Western Canadian Select is a crude oil blend created with oilsands bitumen in Hardisty, Alta. and experts say its price is based on a complicated formula.

Energy market analysts say Canadian oil wells will likely continue to be shut down amid weak prices despite an agreement to limit output struck by OPEC and other major producers on the weekend.

Western Canadian Select closed at US$5.29 on Wednesday.

An oil and gas analyst says record low prices for oilsands crude could lead to up to 20 per cent of Canada's thermal bitumen production being shut down over the next few months.

World oil prices have fallen so low that Canadian producers are being advised not to spend any money on drilling and, in some cases, to stop producing crude oil from existing wells.

Crude-by-rail shipments by oilsands producer Cenovus Energy Inc. jumped to 120,000 barrels per day in January from 106,000 in December.

Higher oil prices are expected to boost cash flow for the large Canadian crude producers but analysts say the extra money is unlikely to be added to growth budgets.

Canada's largest oil producers are calling on the Alberta government to reward companies that commit to adding crude-by-rail capacity by easing their oil curtailment levels.

The Alberta government says it will ease its oil production curtailment program by 25,000 barrels per day in August.