Economists say Alberta's oil production cuts will dent Canada's 2019 GDP growth

Economists say Alberta's oil production cuts will dent Canada's 2019 GDP growth

The provincial government is implementing a short-term reduction in oil production beginning in 2019 in an effort to address the oil price differential that's affecting Alberta.

There will be a 10,000-barrel-per-day exemption to ensure small producers are not hurt disproportionately.

"Every Albertan owns the energy resources in the ground, and we have a duty to defend those resources", Notley said in a statement. This is especially true if companies with their own US 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.

The curtailment is seen as a way to reduce volatility and narrow the price differential by at least $4, adding an estimated $1.1 billion to government revenue for 2019-20.

Calgary-based Cenovus climbed as much as 13 percent in Toronto and Canadian Natural Resources gained 16 percent, while Devon Energy Corp., a USA oil company with a presence in Alberta, rose as much as 8 percent in NY.

Members of the oil industry, meanwhile, were split Monday on whether production cuts are a good idea. Notley thanked them both in her speech. The province estimates 25 producers will have to impose cuts.

Reaction to the curtailment from United Conservative Party leader Jason Kenney and Alberta Party leader Stephen Mandel was swift. "I will never stop fighting for Alberta".

Economists say Alberta's oil production cuts will dent Canada's 2019 GDP growth

While praising her main opponents in the Alberta legislature, Notley put the blame for the current state of affairs right where most Albertans seem to think it belongs: On the federal government for not approving the pipelines Albertans have now persuaded themselves will solve all their economic problems.

About the only dissenting voice has come from Canada's integrated oil companies, whose refineries have been benefiting from the cheaper feedstock.

Similarly, while oilsands giants like Cenovus Energy Inc. and Canadian Natural Resources Ltd. will likely be happier, it's far from clear whether this will translate into anything that helps the NDP's political circumstances.

"We've got challenges with respect to pipelines, we've got challenges with respect to rail and now we've got challenges with respect to our demand market", Allan Fogwill, chief executive officer of the Canadian Energy Research Institute said at a presentation in Calgary Wednesday.

A wider-spread collapse in oil prices could wash away much of the gains from Alberta's production cuts, several analysts said Monday.

And there is no sign whatsoever that any method developed to ship Alberta oil - whether in the form of rail cars, new pipelines or rehabilitated old ones - will not eventually be used to its fullest capacity, with predictable impact on global climate change.

However, it was Notley's assurances that a decision on curtailing output was coming soon that helped boost heavy Canadian crude prices by 49 percent last week. Western Canada Select (WCS) has plunged below $15 per barrel, representing a discount to WTI that has hovered at around $40 per barrel. The grade's discount to USA benchmark oil prices widened to $50 a barrel last month, also a record. Off-topic, inappropriate or insulting comments will be removed.

More news: Australian Test cricketer Usman Khawaja’s brother arrested by counter-terrorism police
More news: Radio station bans Christmas classic, labelling it inappropriate
More news: Mark Sanchez Had A Butt Fumble Recovery Against The Eagles

Related Articles

  • Manchester United Have Launched Eye-Watering £91Million Bid For Kalidou Koulibaly

    Manchester United Have Launched Eye-Watering £91Million Bid For Kalidou Koulibaly

    Mourinho was forced to play Scott McTominay and Nemanja Matic at the heart of United's backline in the draw against Southampton . When quizzed about whether the rumours are true, Mourinho replied: "I can not answer to your question".
    Hit the switch: Trumps light National Christmas Tree

    Hit the switch: Trumps light National Christmas Tree

    Set in a dystopian future about a woman living in a totalitarian society, the streaming service's drama has won six Emmy Awards during its first two seasons and recently confirmed it will have a third season.
    Eddie Murphy welcomes his 10th child

    Eddie Murphy welcomes his 10th child

    On Friday, Murphy's fiancée Paige Butcher gave birth to their second child, a baby boy they named Max Charles Murphy . Eddie Murphy just welcomed his 10th child. "Both mother and son are doing well", the rep said.
  • Woods avoids penalty for double-hit

    Woods avoids penalty for double-hit

    Woods said he wasn't aware there was even an issue until he reached the scoring area. And when he did that, Tiger said that he did not think he hit the ball twice.
    Palmer scores 23, Nebraska beats IL  in Big Ten opener

    Palmer scores 23, Nebraska beats IL in Big Ten opener

    Illini coach Brad Underwood joked that fouling Palmer was strategic. "They made it really hard (on offense)", Copeland said. The Huskers defeated IL 75-60 on Sunday for their first conference win, improving to 7-1 on the season .
    Unilever buys GSK’s Indian Horlicks business for 3.3 billion euros

    Unilever buys GSK’s Indian Horlicks business for 3.3 billion euros

    Mehta added. "Despite this, the category still remains under-penetrated in India", it said. This transaction values the total business of GSK Consumer India at Rs 31,700 crore.
  • Ashley hopeful Newcastle United sale can be concluded in coming weeks

    Ashley hopeful Newcastle United sale can be concluded in coming weeks

    Yet, according to the Newcastle owner, this time around he is more confident of striking a deal to sell the club. Newcastle owner Mike Ashley says he is "hopeful" the club will be sold to "an owner that will please everybody".
    Phillies, Mariners Nearing Deal Centered Around Jean Segura

    Phillies, Mariners Nearing Deal Centered Around Jean Segura

    The Seattle Mariners are continuing to trade away veteran players, with shortstop Jean Segura being the latest to be moved. Crawford, 23, hit.214 with three homers and 12 RBIs over 49 games last season with the Phillies.
    Nats to acquire Gomes from Indians

    Nats to acquire Gomes from Indians

    Catcher Yan Gomes , one of the most talked-about players in the trade rumor mill, has found a home in the nation's capital. He was also excellent behind the plate and got selected an AL All-Star for the first time.
  • Pep Guardiola defends Jurgen Klopp over Merseyside derby celebrations

    Pep Guardiola defends Jurgen Klopp over Merseyside derby celebrations

    And Everton defender Michael Keane said the team were rallying around England goalkeeper Pickford following his late mistake. We knew how strong they were but today they were outstandingly strong and hard with the way they played.
    This Arab passport is officially the most powerful in the world

    This Arab passport is officially the most powerful in the world

    The UK ties for fourth place with Belgium, Austria, Japan, Greece, Portugal, Switzerland, Ireland and Canada on 164 countries. Taiwan's passport holders may visit up to 131 countries without having to obtain a visa, an increase of 10 from past year .
    Dutch officials reject man's suit to be younger

    Dutch officials reject man's suit to be younger

    He argued: "You can be born as a small girl and as attractive as you are you could say 'I feel like a man I want to have a dick". The judgment stated that Ratelband was already protected from discrimination on the basis of age by established law.