Alberta is ever so slightly opening its oil taps once more.
Following Premier Rachel Notley’s December announcement stating that the province would be slowing its oil production in an attempt to increase its value and deplete its stores, Alberta saw a decrease in oil production by 325,000 barrels per day as of January 1.
- Alberta slowing oil production to drive prices up
- The price of Canadian oil is expected to improve throughout 2019
- $2 billion oil facility being built in Alberta, creating 2,200 jobs
Two months later, and Notley has announced that the province would be slightly easing off the reduction, allowing for 25,000 additional barrels to be produced collectively across Alberta.
This brings the total to about 3.66 million barrels of oil per day being produced in Alberta and an overall increase of 100,000 barrels over the January 1 limit.
The ultimate goal is to see just 95,000 barrels per day less than what was being produced prior to the slow down, and to keep that amount of production consistent until December of this year.
“As we fight to get full value for the resources owned by all Albertans, we know that our plan is working as we continue to reduce the amount of oil we have in storage,” said Notley in a release.
“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. 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.”
According to the release, storage levels have been trending downward since January, and the price differential between Alberta heavy oil (WCS) and the US mid-continent price (WTI) remains narrow.
It is also noted that warmer spring weather would allow for increased transportation, along with the 120,000 additional barrels per day that are expected to be able to be shipped once Notley’s oil by rail plan is fully operational.
Before the slowdown began, Alberta had been producing 190,000 barrels per day more than what was capable of being shipped, putting a strain on excess oil storage capabilities.