Wednesday , December 1 2021

Alberta premier announces oil production of 8.7 percent to increase prices


Rachel Notley, Alberta Premier, announced a downgrade of 8.7% in crude oil and bitumen production from January 1, 2019, or a decline of 325,000 barrels per day.

On Sunday evening, Notley said the daily cuts will remain in place until the 35 million barrels of oil currently in the warehouse are released in the spring.

With the start of the new 3rd line line of Enbridge, the reduction will drop to an average of 95,000 barrels until the end of 2019.

The Alberta government also expects to buy locomotives and wagons to transport 120,000 barrels a day.

Interrupts will affect about 25 larger bitumen and conventional producers. Larger producers will see the first 10,000 barrels exempted each day. Companies producing less than 10,000 barrels per day will not be affected by daily cuts.

The announcement of Notley, Western Canada is the determination of the difference in oil prices in accordance with West Texas Intermediate (WTI) criteria. This difference increased by around $ 50 due to insufficient pipeline capacity for Alberta oil to enter the market in late October.

The government estimates that Alberta has lost $ 80 million a day due to this reduction. The measures will limit the gap to a barrel of US $ 4 and contribute $ 1.1 billion to Alberta's treasury this year.

The government said it believes the industry will not voluntarily conduct these cuts after sending three ambassadors to meet small and large producers.

The energy minister of Alberta has the authority to determine the rates of collective dismissal by a monthly ministerial order.

Alberta's official opposition United Conservative Party's leader Jason Kenney will react 30 minutes later.

Kenney & # 39; s news conference will be live on Facebook.

Any change in the price of oil has major implications for the resource-dependent economy of Alberta.

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Alberta's NDP Premier Rachel Notley is expected to announce forced cuts in oil production on Sunday night. (Adrian Wyld / Canada Press)

Notley, in light of Canada's Federal Coast Court, was faced with the decision-making pressure in August, which called for the suspension of the Trans Mountain Pipeline expansion on the West Coast.

The so-called price gap started to increase sharply in September and rose to $ 47 in the last 10 days of October.

The markets closed on Friday, while the difference was $ 28.50.

According to the Alberta government, this problem stems from the inadequacy of pipeline capacity for overproduction and the introduction of oil. Notley said that an op-ed piece this week sells 35 million barrels of oil, which he calls "fire prices."

First, on November 17, a production cut was proposed by the Alberta Party. Kenney initially called for industry-specific volunteer pavements, but changed his mind and suggested a 10 per cent decline last week.

In a speech Thursday, the Toronto Chamber of Commerce said Notley, Alberta, wanted to buy 80 locomotives and each train withdrew to 100 to 120 vehicles to buy oil for the market.

However, this is a medium-term solution to the current accumulation in the warehouse, as it will take time to buy or rent the necessary rail equipment.

On Friday, Notley used op-ed to demonstrate the pros and cons of a sector-wide production cut.

Allowing the status quo to continue would not harm producers with refinery operations, but would harm small companies, leading to bankruptcies and job losses.

If a temporary production outage occurs, Notley said it could help reduce oil stocks and reduce the price gap between Western Canadian and Western Texas agents.

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