• 5 minutes Covid-19 logarithmic growth
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 14 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 2 hours Cpt Lauren Dowsett
  • 2 hours Trump will meet with executives in the energy industry to discuss the impact of COVID-19
  • 38 mins Its going to be an oil bloodbath
  • 52 mins Marine based energy generation
  • 4 mins What If ‘We’d Adopted A More Conventional Response To This Epidemic?’
  • 5 hours Which producers will shut in first?
  • 3 hours CDC covid19 coverup?
  • 3 hours How to Create a Pandemic
  • 3 hours Iran-Turkey gas pipeline goes kaboom. Bad people blamed.
  • 21 hours The Most Annoying Person You Have Encountered During Lockdown
  • 14 hours The idea that electric cars are lowering demand is ridiculous.
  • 15 hours Russia's Rosneft Oil Company announces termination of its activity in Venezuela
  • 20 hours Natural gas price to spike when USA is out of the market

Breaking News:

IEA: OPEC Can’t Save The Oil Market

Could Oil Really Fall To $0?

Could Oil Really Fall To $0?

More bad news for the…

Alberta Further Relaxes Oil Production Cut

Rail sunset

With Canadian crude oil prices climbing higher, the Alberta government loosened the production cut imposed at the beginning of January by 100,000 bpd and has plans to further relax it next month. This month, local producers can extract 3.66 million bpd of heavy crude.

“A short-term production limit is not ideal or sustainable, which is exactly why we have a plan to move more oil by rail in the coming months while we fight for the long-term solution of building pipelines to new markets,” Premier Rachel Notley said, also acknowledging that the cuts had served their purpose: “The decision to temporarily limit production was applied fairly and equitably, and our plan is working to stop allowing our resource to be sold for pennies on the dollar.”

However, the lower cuts of 95,000 bpd that Notley announced in December will likely stay in place as planned until the end of the year. The purpose of the initial, higher cuts, of 325,000 bpd, was to reduce the inventory overhang, which has now fallen to a more manageable level and the discount of Western Canadian Crude to West Texas Intermediate has narrowed substantially. Last year, the discount at one point exceeded US$50 a barrel. Now, it is in the single digits.

This latter fact, however, has had some analysts worried that refiners will start seeking cheaper alternatives to Canadian crude. What’s more, one Scotiabank analyst said the production cut had already affected the profitability of oil-by-rail transportation in a negative way and the discount had to widen again to make this way of transporting crude profitable again.

"The curtailment has either taken initially too much oil or took it off the market too quickly," Rory Johnston told CBC this week. Alberta’s government, pressed for oil transport capacity, earlier announced it would buy 4,400 rail cars to ship more oil by rail as new pipelines have yet to be built if at all.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage




Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News