Oil production cuts could mean a positive return locally

Alberta premier announces 8.7 per cent oil production cut to increase prices

Alberta Premier Rachel Notley Orders Oil Production Slashed To Fight Price Crisis

The opposition leader said he agrees with Notley's action; the UCP's Jason Kenney says Alberta should have never been in this situation to begin with, criticizing Ottawa for killing pipeline projects. That's on top of mounting concern that the country's regulatory framework makes it very hard to get much-needed pipeline projects approved. Still, she said many pipeline delays were hard to predict amid assurances by industry and government that pipelines could be successfully built to tidewater.

"It should always be kept in mind that oil is a global industry, and moves in the benchmark WTI price can outweigh changes in the spread, leaving Canadian producers in the lurch", said Brian DePratto, a senior economist at TD Bank Group.

Oil prices were pressured by a weekly report from the American Petroleum Institute (API) that said United States crude inventories rose by 5.4 million barrels in the week to 30 November, to 448 million barrels, in a sign that U.S. oil markets are in a growing glut. The company lives on today as a gas-station chain owned by Suncor.

Shares in the companies most likely to benefit from the move to curtail crude production starting January 1 soared Monday as oil price differentials plunged.

Moe announced Monday that Saskatchewan will not be following Alberta's lead in cutting production. The NEP remains infamous in Alberta, seen both as shorthand for government overreach and a reason to be wary of leaders named Trudeau.

Alberta Premier Rachel Notley announced Sunday the province will require producers with more than 10,000 barrels per day of output to cut production by about 8.7 per cent until there is enough shipping space on pipelines to improve prices, expected to take three months. Notley and the industry proponents of the move have argued that it's not so much government meddling in the market, rather it's a way of fixing a broken market.

"There's not a lot of celebrations going on around downtown Calgary", Pourbaix said of the city where his company and most of Canada's energy industry is based.




"Owing to decades of failure and inaction by successive federal governments, Albertans are unable to transport much of the oil that we produce to market through modern, well-regulated pipelines". Imperial Oil Ltd. made similar comments.

US West Texas Intermediate (WTI) crude futures were at $52.64 per barrel, down 61 cents, or 1.1%, from their last close. Shares of oil producers operating in Alberta also surged, with Cenovus posting its biggest intraday gain ever. The restriction will come into effect in January and will be in place until December 31, 2018.

In written comments Monday, energy minister Amerjeet Sohi said that Ottawa shares in "Alberta's frustration at the ongoing and unacceptable discount" on Canadian crude.

The Railroad Commission of Texas did something similar in the 1930s, before OPEC was created, because large oil producers at the time were anxious that independent drillers were over-supplying the market.

"Every Albertan owns the energy resources in the ground, and we have a duty to defend those resources", Notley said in a statement.

"We don't actually need Ottawa's sympathy". She was steely-eyed and - dare I say it - at some moments evocative of Margaret Thatcher on the eve of that war at the south end of our then-still-chilly planet. Small producer Whitecap Resources Inc. now doesn't plan to cut any jobs as a result of the Alberta plan, Chief Executive Officer Grant Fagerheim said in an interview.

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