10/3 podcast: Alberta NDP gambles on oil production cuts

Canadian Heavy Crude Surges After Alberta Imposes Oil Cuts

Suncor Energy Inc., a Canadian oil producer that also has refineries in the country, said in a statement Monday that price differentials were already narrowing.

"The price gap is caused by the federal government's decades-long inability to build pipelines".

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.

"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". The surplus is filling storage up quickly.

Notley says Alberta's resources are being sold for "pennies on the dollar" and she has ordered oil producers to slash production by 8.7 percent in an attempt to shore up prices. Companies that produce less than 10,000 barrels a day will not be affected by the daily cuts.

Moe said any cut in Saskatchewan will hurt conventional oil production and would have little impact on the price of oil. After three months, production will be cut by 95k bpd through 2019.

The provincial government went to lengths to describe the measure as temporary, and one that will be a benefit to government finances.

"We know that they were not in favour of curtailment but again what we've tried to do is reach a balance and so at the moment, Albertans are getting $10 a barrel, Canadians are getting $10 a barrel of oil, we are losing out of billions of dollars", he said.

The production curbs will provide some cushion for producers, but will not eliminate the discount on heavy Canadian oil that has persisted for many years, said Jihad Traya, manager at energy consultancy firm Solomon Associates LLC in Calgary.

The initial curtailment of 325,000 barrels per day is expected to drop over the course of 2019, with an estimated average of 95,000 barrels a day once excess storage is cleared.

"It should always be kept in mind that oil is a global industry, and moves in the benchmark WTI price can outweigh changes in the spread, leaving Canadian producers in the lurch", said Brian DePratto, a senior economist at TD Bank Group.

"This intervention will provide the kind of predictability and stability to industry players to allow them to keep people on because they can see a light at the end of the tunnel and so we are hoping it will have a neutral to positive affect on jobs going forward", said Notley. Any effort to cut output by one company only stands to benefit another.

"We trust that the agenda for our upcoming First Ministers' Meeting can be revised to better reflect the need for a substantive discussion on issues of critical importance to the Canadian economy", the letter said. "This is an extreme case". The restriction will come into effect in January and will be in place until December 31, 2018. "We interpret the phrasing of the announced cut as keeping production down 50 kb/d [year-on-year] in 2019 and 200 kb/d below our prior assessment with the greatest impact on 1Q19 (down 225 kb/d quarter-on-quarter) before new rail capacity gradually comes online from April onward", Goldman Sachs wrote in a note.

Moe said the province will continue to advocate for the federal government to create a long-term solution by building pipelines so both provinces can "sell our oil for what it is worth". On Friday, Canadian oil closed at US$21.93.

A number of proposed pipelines have been delayed or rejected.

Related News:

  • Newcastle owner Mike Ashley hopes to have club sold by January

    Newcastle owner Mike Ashley hopes to have club sold by January

    Asked whether that was a realistic proposition, he added that it was "possible", but that realistic was "maybe too strong a word". In a stunning revelation on Sky News , Ashley confirmed he is keen to flog the club as soon as possible.
    Liberals adopt new rule to stop the revolving prime ministership

    Liberals adopt new rule to stop the revolving prime ministership

    The Labor party already has rules that restrain leadership changes including of an opposition leader, although they could be altered by a simple majority of caucus.
    Tesla autopilot blamed as driver found asleep at 70mph

    Tesla autopilot blamed as driver found asleep at 70mph

    He has been identified as Alexander Samek of Los Altos, 45, who happens to be a member of the Los Altos Planning Commission. All in all, it took about seven miles and seven minutes for the Tesla to come to a stop in the right hand lane.
  • Arsalan Khawaja: Australia cricket star's brother 'framed' terror suspect

    Arsalan Khawaja: Australia cricket star's brother 'framed' terror suspect

    Willing added that the grievance was over a woman, and that line of enquiry was "part of the process" being investigated. Following "definitive advice", NSW Police formally withdrew the charges on November 16.
    Jurgen Klopp charged with misconduct for celebrating last-minute Liverpool victor  on pitch

    Jurgen Klopp charged with misconduct for celebrating last-minute Liverpool victor on pitch

    But Marco Silva introduced young winger Ademola Lookman off the Everton bench and his side's attacking threat instantly improved. I'm not sure what the FA will do in this situation.
    First Muslim country that wins title of 'Most powerful passport'

    First Muslim country that wins title of 'Most powerful passport'

    Singapore, which now shares the number two spot with Germany , was the first passport from Asia to top the passport power list. The Singaporean and German passports offer visa-free or visa-on-arrival travel to 166 countries worldwide.
  • Mayfield will vote for Murray to win Heisman Trophy

    Mayfield will vote for Murray to win Heisman Trophy

    The finalists were announced Monday, hours after the deadline for 928 voters, including former winners, to submit their ballots. Murray led Oklahoma past Texas in the Big 12 Championship by completing 25 of 34 passes for 379 yards and three touchdowns.
    Take-Two Red Dead Online Fears May Be ‘Overblown’

    Take-Two Red Dead Online Fears May Be ‘Overblown’

    More specifically, they have directly addressed player concerns over the in-game economy which as of right now, is a total grind. There is regular ol' cash, and also gold nuggets/bars, the latter of which will eventually be tied to microtransactions.

    Michelle Obama on book tour encourages girls to ‘practice sisterhood’

    All right, I'm back now. "Sometimes that stuff doesn't work", she said . As first lady, you're not alone much. She can say whatever she wants now".
  • NHL approves Seattle expansion; will be league's 32nd franchise

    NHL approves Seattle expansion; will be league's 32nd franchise

    A Seattle franchise would mean the addition of a 16th team to the Western Conference, matching the number in the East. The move will come as a new expansion team in Seattle will join the league and begin play in the year 2021.
    Urban Meyer to retire as Ohio State’s head coach

    Urban Meyer to retire as Ohio State’s head coach

    It was at Florida where Meyer became a household name, winning his first two national championships (2006, 2008). A year later, he actually resigned, saying he wanted to spend more time with his family.

    Sarah Hyland's 14-Year-Old Cousin Killed By Drunk Driver

    The campaign quickly exceeded its $US25,000 goal, raising more than $US30,000 in one day with the help of Hyland's fanbase. In her second post about the accident, Hyland railed against the driver who allegedly caused it.

Most liked

NYPD finds couple who dropped engagement ring down street grate
The NYPD had been looking for Drennan and his fiancee, Daniella Anthony, since they retrieved the ring Saturday morning. LISTEN: Our Failing Fabulously podcast celebrates those times in life when things go wrong. but somehow work out.

Venezuela's Maduro is on his way to Russian Federation to meet Putin
Venezuela is suffering a bout of hyperinflation and a fifth year of recession that has led to shortages of food and medicine. The inflation rate is expected to reach one million percent this year, according to the International Monetary Fund (IMF).

7 arrested by JMPD at Global Citizen Festival, says City
It honoured the centenary of Nelson Mandela and aims to end extreme poverty by 2030. In 2013 , thieves stole cash takings at the stadium after a Justin Bieber concert.

Trump Reconsiders Qualcomm-NXP Deal Despite Qualcomm’s Intention to Walk Away
The Trump administration had unsuccessfully lobbied the Chinese government earlier this year to give its blessing to the deal. Qualcomm abandoned the deal to buy NXP in July, after it was unable to secure Chinese regulatory approval.

Sri Lanka's ousted PM likens president to Hitler
The Tamil National Alliance (TNA) has 16 seats in the house and JVP has six legislators. The UNP has mustered 123 in the 225-member assembly.

Uttar Pradesh: Cop Among Two Killed In Clashes Over Cow Slaughter Rumour
Police in Bulandshahr district, where the clashes occurred, have deployed additional personnel. Allegedly, the mob was also protesting against illegal slaughterhouses, reports The Quint .

Delhi Daredevils officially renamed Delhi Capitals
The squad has already been bolstered by the return of Shikhar Dhawan, who has switched over from Sunrisers Hyderabad. Delhi in fact are the only original team to have never made it to the final of any edition of the IPL.

Battlefield V Begins New DLC Structure with First Update Overture
As always, we'll bring you these details as soon as they're available. The rest of the patch's content is strictly multiplayer-focused.

The Marvel Cinematic Universe Is Getting Its First Asian Superhero Franchise
Marvel Studios has already teased major announcements this week in the form of new Captain Marvel and Avengers 4 film trailers. Marvel Studios reportedly is working on its first feature film with an Asian hero as the lead.

Redskins QB Colt McCoy continued to play despite fractured fibula
Despite their injuries at the quarterback position, the Redskins are still very much in the hunt in the NFC East. Mark Sanchez entered the game after the injury and appears to be Washington's top quarterback going forward.

This radio station is banning 'Baby, It's Cold Outside.' Here's why
The 1940s Christmas classic " Baby, It's Cold Outside " no longer stands the test of time. "But baby its cold outside". More than 5,000 people have voted since the station launched the poll on their Facebook page on 29 November.

Tumblr will ban all adult content on December 17th
This announcement comes a few days after The Verge reported Tumblr was removed from Apple's iOS App Store following a child pornography incident.

Pete Davidson Calls Out Online & IRL Trolls For Targeting His Mental Health
Especially in today's climate where everyone loves to be offended and upset it truly is mind boggling . National Suicide Prevention Lifeline at 800-273-TALK (8255) any time of day or night or chat online .

Patrick Mahomes Offers Appropriate Reaction To Kareem Hunt Video
The NFL has been investigating the incident since that time, and he is now on the Reserve/Commissioner Exempt List. According to La Canfora, the National Football League is now conducting two separate investigations against Hunt.

Bush’s service dog honors the late president
The casket will then be transported by Union Pacific Railroad to Texas A&M in College Station for burial on Thursday. The president had a form of Parkinson's disease, and Sully could open doors, pick up items and summon help.