Sask. won't follow Alberta with cut to oil production

Canada’s ambassador to the United States David McNaughton speaks in Toronto on Tuesday Sept. 26 2017

Canada’s ambassador to the United States David McNaughton speaks in Toronto on Tuesday Sept. 26 2017

Production controls will impact both bitumen and conventional oil producers, although some of the smallest companies will be exempt.

The decision by Notley to curb oil supplies marks the most substantial market intervention in decades, and comes after discounts for Canadian heavy oil breached US$50 in recent months, the highest on record. Western Canadian Select (WCS) is the reference price for heavy crude oil from the oilsands delivered at Hardisty, Alta. However, Imperial and Husky said Friday they remain opposed to involuntary production cuts.

Canada's Federal Court of Appeal halted the contentious Trans Mountain pipeline expansion that would almost triple the flow of oil from the Alberta oil sands to the Pacific Coast - a setback that came just as the federal government bought the project to help ensure it gets built amid strong environmental and aboriginal opposition in British Columbia.

Alberta's regional government announced Monday that it will require local oil companies to reduce their production by 8.7% in 2019, an amount which is equal to 325,000 barrels per day, in an effort to lift prices of Canadian crude off from record low levels beneath $20 per barrel.

"They don't feel it will actually be effective in narrowing the differential".

Already, Canadian oil producers including Canadian Natural Resources Ltd. and Cenovus Energy Inc. announced that they had curtailed output.

Saskatchewan Premier Scott Moe said in a statement that the province isn't considering following Alberta's example.

Western Canadian Select's discount to USA benchmark West Texas Intermediate narrowed $6 to $23 a barrel as of 3:51 p.m.

Sask. won't follow Alberta with cut to oil production

The Enbridge Line 3 project, shipping more oil from Alberta to the U.S. Midwest is expected to come online late next year.

The Pound-to-Canadian-Dollar rate was -0.60% lower 1.6807. But she has said that rail cars, new pipelines and increasing domestic refining capacity would not bring relief soon enough. "We are recognizing that there are going to be some unpredictable consequences and they are going to try and monitor it closely".

"Many of these policies (were) supported either by acquiescence or actively by the NDP government", said Kenney.

The price of oil peaked in June 2014 north of $100 per barrel, and a multiyear-long crash culminated in oil trading below $30 a barrel in 2016.

"Pipelines only solve one component of this", Traya said.

So, Notley's short news conference Sunday evening was a bravura performance. "The poor finish to Q3 GDP had already put our call for a January rate hike by the Bank of Canada at risk, so we'll need to see some healthy readings for other sectors in the next few weeks to leave that view intact".

Notley said Prime Minister Justin Trudeau's government must do its part by rolling back proposed legislation that she says will make it much harder for energy megaprojects to be approved. The government estimates Alberta is losing $80 million a day due to the discount. As the excess storage clears, the reduction is expected to drop to 95,000 barrels a day until the end of next December.

The production curbs announced by Alberta targets producers that pump out more than 10,000 bpd, or just 25 of the roughly 300 oil companies now operating in the province.

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