Alberta prepared to cut output to shore up oil prices
Alberta will curtail oil production if necessary to help an industry which is set to start laying off workers in response to a global price war, its premier said on Wednesday.
Premier Jason Kenney said he was worried crude-by-rail shipments could plunge as a result of the price slump to around 100,000 barrels per day in April from the expected 500,000 barrels per day in March. This, he said, could cause inventories to balloon.
“We will not allow that to happen. We will use the curtailment tool responsibly to ensure at least a survival price for our producers to get through this period,” Kenney told Reuters.
Alberta has curtailed production for more than a year because of congested pipelines. The province is restricting production to 3.81 million barrels per day in March and April.
The oil sector in Alberta has yet to recover from a 2015 price shock, Kenney told Reuters.
“We, unfortunately, do expect to see a number of layoff announcements coming from the energy sector in the next two or three weeks,” he told reporters at Calgary’s airport before flying to Ottawa.
The 10 provincial premiers are due to meet federal Prime Minister Justin Trudeau for talks on Thursday and Friday. Kenney said he would be asking for financial assistance for laid-off workers.
Trudeau said earlier he would raise the impact of falling oil prices on energy-producing regions.