Alberta’s policy of matching oil production to export capacity will see a slight increase for April as government works to slowly ease the limits.
In response to data available, Alberta is increasing production in April by 25,000 barrels to a total of about 3.66 million barrels a day, an overall increase of 100,000 barrel per day from the January limit.
Factors related to the increase in the limit are:
- Storage levels have shown some volatility but have trended downward from January.
- The difference in price between Alberta heavy oil (WCS) and the U.S. mid-continent price (WTI), which can be an indicator of capacity shortfall, remains narrow.
- Warmer weather in spring can increase transportation capacity with potentially less diluent needed in pipelines.
“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. 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.”
~Rachel Notley, Premier
This change is part of the progress towards Alberta’s original goal of reducing production by an average of 95,000bpd overall by the end of the year when the policy is scheduled to end.