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Canada’s largest oil producer, Canadian Natural Resources, is ready to back a potential pledge by Canada’s federal government for a production cut if it is a fair broad-based approach, the company’s president Tim McKay said on Wednesday.
“We supported curtailments here in Alberta to help balance the market when you have these issues,” McKay said on an online investor conference, as carried by Reuters.
“To me, as long as it’s a broad-based approach, we could support it,” the executive added.
Canada’s oil industry has been one of the worst-hit in the price crash and the Saudi-Russian oil price war, with the price of Canadian oil plunging to below US$5 a barrel last week. Faced with plummeting oil prices, many Canadian companies hastened to reduce capital spending, curtail operations, defer investments and start-ups, cut executive salaries, and lay off workers.
Major oil producers such as Saudi Arabia, Russia, and the United States are set to discuss ways to potentially cut global oil production by 10 million bpd later this week at an OPEC+ video meeting on Thursday and a G20 energy ministers’ video conference on Friday.
The leaders of the OPEC+ group, Saudi Arabia for OPEC and Russia for non-OPEC, are reportedly ready to negotiate a massive global production cut amid sinking demand, despite a bitter weekend spat between the former allies about who ditched whom in the OPEC+ talks.
Both Saudi Arabia and Russia are signaling that they are ready to talk but are pointing out that any massive cut should involve the United States, too, and are hinting at the participation of every major oil producer.
Analysts say that even if a larger so-called OPEC++ group – involving OPEC+ plus the U.S., Canada, Brazil, Norway, and other producers not part of OPEC+, were to agree to a massive cut of 10 million bpd, this will still be much lower than the demand loss expected in Q2 and will not go far to prevent global storage filling to the brim by mid-May.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.