OPEC’s supply cuts are providing a windfall for producers of heavy crude from Western Canada and the Gulf of Mexico. Prices for Western Canadian Select and Mars grades have strengthened relative to benchmark West Texas Intermediate since OPEC began implementing its reductions this year. These gains have held even after WTI sank below $50 a barrel earlier this month amid rising U.S. output. The Organization of Petroleum Exporting Countries and other large producers agreed to reduce output from January to rebalance an oversupplied global market, but individual members were left to decide how to implement their pledges. Saudi Arabia and its neighbors reduced exports of less-expensive heavy, sour crude, leaving refiners to seek similar grades from North America. Heavier oil is more complex to refine, requiring more secondary processing to make high-value transportation fuels. “We are seeing a real hunger for the heavy oil,” Bill McCaffrey, chief executive officer […]