Premier Rachel Notley says Alberta will be easing mandatory oil production cuts due to the lower storage levels. The government will be allowing an additional 25,000 barrels to be produced a day starting in April.
This is the second increase since the government cut production limits by 325,000 barrels per day to deal with the low oil prices. The last increase took place January 30th when Notley announced they would allow an additional 75,000 barrels per day.
Oil price differences between Alberta heavy oil and West Texas Intermediate remain narrow and with the warmer weather on its way less diluent will be needed in the pipelines allowing the oil to flow easier.
“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,” Notley said Thursday in a release. “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.”
Notley says the short term production limits aren’t ideal or sustainable which is why the province it aiming to move more oil by rail as the fight for the pipelines continues.