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Suncor Energy Inc. oil tanks near Fort McMurray, Alberta.

Canada's oil producers got a glimmer of hope Thursday amid speculation that an international deal was in the works to cut global production, sparking a market rally.

Crude prices surged by more than 8 per cent in early trading after Russian energy minister Alexander Novak said Saudi Arabia and other OPEC members may be willing to do a deal with non-OPEC members to cut global production by as much as 5 per cent, which, in Russia's case, would amount to 500,000 barrels per day.

But analysts were skeptical that an agreement was imminent, or that such a deal would actually be implemented, even if one were struck. "The speculation [about a deal] doesn't seem to have a very strong foundation," said Julian Jessop, chief commodities economist with Capital Economics. "Even if it was done, I don't think compliance with it would be very strong."

Mr. Jessop said Moscow, in particular, has a history of reneging – pointing to a 2001 agreement – while Russian oil companies are desperate to maintain production and compete more aggressively than does Saudi Aramco, which has a monopoly on the kingdom's oil production.

Though giving up some early gains, crude prices had a strong showing Thursday, with the North American benchmark, West Texas intermediate, climbing by $0.92 to $33.22 (U.S.) a barrel at closing.

Canadian oil and gas shares surged along with oil prices, and in recent sessions have regained a big chunk of value lost in the first couple of weeks of the year. The S&P/TSX energy group rose almost 5 per cent, but remains 4 per cent below its level at Dec. 31, before the sector, along with oil prices and the Canadian dollar, sank to 12-year lows.

Biggest gainers on the day included companies with high levels of debt and a focus on crude oil projects, including MEG Energy Corp., up 18 per cent; Encana Corp., up more than 14 per cent; and Baytex Energy Corp., up more than 9 per cent.

Some of the gains likely stem from hope among investors for more merger-and-acquisition activity. On Wednesday, Athabasca Oil Corp. sold interests in its Duvernay and Montney properties in Alberta to Murphy Oil Corp. for $250-million, plus another $225-million in spending commitments by the buyer. Athabasca was up 2.7 per cent late Thursday.

Jim Ritterbusch, president of Ritterbusch & Associates in Chicago, said the prospect of co-ordinated production cuts by OPEC members and Russia helped lift prices in a market that had become too bearish. Still, he dismissed such talk as "a lot of noise" and said little had changed to support higher prices.

"To the contrary, things on the fundamental side are getting worse instead of better. In other words, a huge oversupply is becoming a burdensome oversupply," he said. "That could be why OPEC's throwing some hype out there regarding a possible meeting next month. But I don't think an agreement would be forthcoming."

He added: "At the end of the day, all they would be doing, if they agreed to cut, would be throwing a life raft to U.S. shale oil producers."

Some OPEC members have begun to cut production, including the Saudis, whose daily output is down 3 per cent from last summer's peak. But others, including Iraq and especially Iran, are still battling for market share. France's Total SA announced a deal with Iran's national oil company to purchase Iranian crude for European refineries, as the Persian Gulf country emerges from the sanctions imposed over its nuclear programs.

The majority of Canadian energy firms are set to roll out fourth-quarter results starting next week, and the numbers are bound to be ugly. Some companies are already chopping budgets to cope with the sharp deterioration in oil prices so far this year. For many, it marks the second straight year of deep pullbacks.

On Thursday, debt-saddled Penn West Petroleum Ltd. slashed its 2016 budget by 90 per cent to $50-million (Canadian). It also shut off 4,000 barrels of oil equivalent per day of output and deferred maintenance on another 2,500 boe/d, citing shaky economics. The company said it would spend another $20-million to decommission old wells.

The moves followed earlier cuts by Husky Energy Inc., which chopped planned spending this year by 27 per cent and scrapped its dividend entirely, and Pengrowth Energy Corp., which lowered its 2016 outlay by 70 per cent from a year ago.

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