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(In U.S. dollars unless noted)
By Scott Haggett and Nia Williams
CALGARY, Alberta, April 17 (Reuters) - Bolstered by a weak Canadian currency and robust demand from U.S. refiners, Canadian heavy oil prices have rebounded off first-quarter lows and surpassed the break-even point for most producers, easing pressure on a sector that has slashed budgets and staff.
The price of Western Canada Select, the country's benchmark crude grade, is trading for around C$55 ($45) per barrel, up nearly C$20 per barrel from its mid-March lows thanks to improved market access and U.S. refinery demand ramping up after seasonal maintenance.
The price rise is balm for an oil sands sector that not long ago was preoccupied with cutting spending and lowering costs.
Though no one is yet forecasting a return to fat profits that producers enjoyed when oil rose above $100, current prices are robust enough to cover costs and push netbacks, an industry term for gross profits per barrel, into the black.
"Most of the (thermal) projects are going to have positive netbacks at that price," said Michael Dunn, an analyst with FirstEnergy Capital.
At current prices, most oil sands producers are able to cover the cost of production, particularly for the low-cost thermal projects, that pump steam into the ground to liquefy tarry bitumen so it can be pumped to the surface.
"They're not making a ton of dough but they are not in the red," said Peter Argiris, oil and gas analyst at consultancy Wood Mackenzie.
The current price of C$55 ($45) per barrel is ahead of industry assumptions for 2015. Indeed, Cenovus Energy Inc forecast an average WCS prices of $36.25 per barrel while the Alberta government assumed a price of C$46.33 in its most recent budget.
Even as oil rises, costs for the sector have fallen as layoffs, cutbacks, weakened natural gas prices and lower prices from suppliers cut overheads.
"I would argue (cost reductions are) in the 15 to 25 percent range," Argiris said. "More and more operators are trying to get down costs from their own internal efficiencies, not just squeezing suppliers. As quickly as it (supply cost) comes off, they can ramp up prices again."
The strengthening price is not going to help the sector when first-quarter earnings begin being released later in April. With West Texas Intermediate prices averaging half their level in the first quarter of 2014, industry profits are expected to be weak at best.
$1 = 1.2188 Canadian dollars Editing by Grant McCool