Sask. not following Alberta in cutting oil production

Alberta premier announces 8.7 per cent oil production cut to increase prices

"Our country is losing $80 million dollars a day because we can not get tide water access and world prices for Alberta's oil and gas", they say.

The premiers said the problem is costing Canada $80 million a day and the agenda should reflect that.

Executives of upstream oil companies such as Cenovus and Canadian Natural Resources, however, had urged Notley to intervene for weeks, saying they couldn't transfer the oil they were producing without sufficient pipeline space, leading to hundreds of thousands of barrels clogging up warehouses.

Some in the industry say the move is a step in the right direction while others say it undermines investments already made to improve market access.

The mandated cut ends on December 31, 2019.

Oil prices fell 1% on Wednesday, weighed down by swelling United States (US) inventories and a plunge in global stock markets as China's government warned of increasing economic headwinds. This is especially true if companies with their own USA refining capacity, like Husky Energy Inc., Imperial Oil Ltd. and Suncor Energy Inc., decide to squeeze their own workers till the pips squeak to punish the government for reducing their profit expectations for the greater good. In Alberta, the impact could be much higher, between 0.6 per cent and 1.3 per cent over the same period.

The discount between Western Canadian Select bitumen-blend oil and New York-traded West Texas Intermediate was about US$21 per barrel on Monday morning, an improvement of about US$7 per barrel from Friday, according to Net Energy.

Jackie Forrest, senior director at the ARC Energy Research Institute in Calgary, said some companies should have invested in rail capacity sooner in order to ease pipeline shortages. She was steely-eyed and - dare I say it - at some moments evocative of Margaret Thatcher on the eve of that war at the south end of our then-still-chilly planet.

He said he commends the premier for following through on a suggestion he had brought forward, adding he doesn't believe government action will result in the loss of jobs.

Alberta's decision will "clear the supply glut a lot faster than it would have without intervention", Forrest noted.

Part of that concern is because the widening differential between light and heavy crude (now forecasted to average 31.7 per cent over the fiscal year) leads to provincial coffers being reduced with every percentage point increase in the annual differential.

The action is created to prevent job cuts by letting companies keep people on because they can "see a light at the end of the tunnel", Notley said at a news conference. NY time Monday, the tightest it's been since July, data compiled by Bloomberg showed.

Leader of the Official Opposition, Ryan Meili, was skeptical about those consultations, pointing out that in Alberta some companies supported the cuts. The court ordered the country's National Energy Board to redo its review of the pipeline. We need them to toss the half-hearted statements away, we don't actually need Ottawa's sympathy, we need Ottawa's full attention.

Notley's production cut is temporary and will act as a bridge to Canada ramping up crude by rail exports and expanding Enbridge's Line 3 pipeline by the end of 2019 - two further reasons why investors should think that both oil prices and energy stocks will see their growth sustained, Nuttall said.

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