Published: Wed, December 05, 2018
Markets | By Otis Pena

Canadian oil made a almost 50% move today

Canadian oil made a almost 50% move today

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

"I had spoken last week in Ottawa about the fact that I'd be asking to have the agenda amended", Notley said at the Alberta legislature Tuesday. That's on top of mounting concern that the country's regulatory framework makes it very hard to get much-needed pipeline projects approved.

"If we see that the differential shrinks significantly and that imposing a curtailment is not necessary for the full twelve months then we'll adapt", said Bilous.

Analysts said that means the market is already halfway to the provincial goal as estimates suggest about 150,000 bpd has already been shut in, mainly by Cenovus and Canadian Natural. The technology used to extract Alberta's oil sands was developed largely through government-backed programs that started around the 1920s and continued for decades. The company lives on today as a gas-station chain owned by Suncor.

Cenovus Energy issued a statement praising the move, for which it had advocated due to the extreme pressure on regional oil prices as a result of the pipeline issues.

Of the 378 operators with active oil production in Alberta in October, only 25 produce more than 10,000 bpd, AltaCorp noted. The move was a bid to keep the project alive after Kinder threatened to walk away amid fierce opposition from British Columbia.

Canada's oil-producing province, Alberta, has announced an 8.7-percent reduction in oil production, about 325,000 barrels daily, beginning next year in a bid to raise "historically low prices" in the sector and protect jobs.

Notley has already taken some steps to try to help producers ship more oil to market while the industry awaits the construction of more pipelines.

United Kingdom can unilaterally revoke Article 50, according to legal opinion
May is due to address Parliament Tuesday, opening five days of debate before a December 11 vote on the divorce agreement. The court is assessing the issue under an accelerated procedure, since Britain is due to leave the bloc on March 29.

The first stone has been cast in what is expected to be a tense First Ministers' Meeting on Friday, with Alberta Premier Rachel Notley and Saskatchewan Premier Scott Moe expressing frustration that energy industry issues have been left off the agenda.

Moe said the decision was made "upon the advice from industry".

Some in the industry outright oppose the measure.

The price discount between Western Canadian Select (WCS) and West Texas Intermediate (WTI) has fluctuated in recent weeks, reaching around C$45 a barrel. Shares of oil producers operating in Alberta also surged, with Cenovus posting its biggest intraday gain ever. The cuts will then drop to 95,000 bpd until December 31, 2019.

In written comments Monday, energy minister Amerjeet Sohi said that Ottawa shares in "Alberta's frustration at the ongoing and unacceptable discount" on Canadian crude.

The idea is that the market will stabilize and help close the gap.

"We're facing, I think, something that qualifies as a crisis, or very almost that, and there are no other tools available to the provincial government so given that the market or even coalition of players in the market can't do this on their own without running afoul of price fixing laws, this is something that makes a lot of sense for all of the parties but I give full credit, not just to the fact that they are agreeing on this, but that they're saying that they don't want this to be about partisan politics and they want it to be about the interests of Alberta and I have no question that Albertans want to see more of that kind of collaboration", she said.

"If we put into place the appropriate mid-term and long-term remedies, hopefully we'll be getting pipelines and won't need to have this sort of intervention", Tertzakian said in an interview.

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