Canadian heavy crude strengthened the most since June.

(Bloomberg) -- Canadian heavy crude strengthened the most since June after the Alberta government mandated oil rig flanges gulf coast production cuts across the province.

Western Canadian Select’s discount to U.S. benchmark West Texas Intermediate narrowed $6 to $23 a barrel as of 3:51 p.m. New York time, data compiled by Bloomberg show. The discount shank to as much as $19.75 a barrel earlier in the day, the tightest since July. On an outright basis, prices were up more than $8 a barrel.

Alberta announced late Sunday that oil producers will have to collectively cut output by 325,000 barrels a day, or 8.7 percent, starting in January to alleviate rising inventories and pipeline bottlenecks. The reduction would drop to 95,000 barrels a day by the end of next year.

A surge of oil rig flanges gulf coast production from oil sands projects such as Suncor Energy Inc.’s Fort Hills mine earlier this year ran into limited pipeline space, causing inventories to rise and prices to decline. WCS’s discount to futures fell to $50 a barrel in October amid refinery maintenance in the U.S. Midwest.

Already, Canadian oil producers including Canadian Natural Resources Ltd. and Cenovus Energy Inc. announced that they had curtailed output. Those cuts added up to about 150,000 barrels a day, according to Explorers and Producers Association of Canada.

The province is producing 190,000 barrels a day more than can be shipped out and inventories are “nearing capacity,” Alberta’s government said in a release Sunday. The cuts will reduce volatility and narrow the Canadian crude differential by $4 a barrel relative to what it would otherwise have been.

WCS swaps for calendar year 2019 traded at $19.50 a barrel discount to WTI earlier Monday, compared with $25.75 on Friday, according to buy Wellhead market participants. Prices have since retreated, with bids at minus $21.45.

Other Canadian crudes also rose on the announcement. The discount for Edmonton Mixed Sweet to futures narrowed $8.25 to $14.75 a barrel and synthetic crude’s discount shrank $1.50 to $17 a barrel, data compiled by Bloomberg show.

With assistance from Joe Aboussleman.To contact the reporters on this story: Robert Tuttle in Calgary at This email address is being protected from spambots. You need JavaScript enabled to view it.; Catherine Ngai in New York at This email address is being protected from spambots. You need JavaScript enabled to view it.; Sheela Tobben in New York at This email address is being protected from spambots. You need JavaScript enabled to view it.. To contact the editors responsible for this story: David Marino at This email address is being protected from spambots. You need JavaScript enabled to view it. Mike Jeffers, Reg Gale.