Alberta relieves mandatory oil cuts after rising crude oil prices from the Canadian oil-rich province, while producers are upset.
A new output target next month will be 3.63 million barrels a day, an increase from 3.56 million in January, the government said on Wednesday. Stocks dropped by 5 million barrels, making it easier to reduce prices. The rebate for which heavy Canadian commodities are traded on the American market rose to $ 9.50 a barrel from $ 8.60 earlier, according to traders.
Alberta began to cut production this month as the last stop to collapse in western Canada Choose oil prices as the oil sands industry sank with its worst-ever pipeline gap. But even OPEC controversial supporters have become critical.
Canadian Natural Resources Ltd., which supported production cuts when it was announced in early December, told service companies that it might have to shut down ECHO pipeline because new quota rules would leave too little oil to operate the line, people who they saw the letter. ECHO transfers heavy commodity from West Alberta to the Hardist storage center.
"The idea of finding a rational way to get out of constraints would be a good idea," said Gary Mar, general manager of Canada's Oil Services Association, at a press conference Wednesday. "This is usually the busiest time in this field and people are now released."
Integrated producers such as Imperial Oil Ltd. Exxon Mobil Corp., which can process oil at refineries, said the cuts could exceed the state budget and strengthen the confidence of investors in the province.
The moderation announced on Wednesday may raise local raw material prices as compared to Mayan oil from Mexico, said Greg Pardy, an analyst at RBC Dominion Securities in Toronto.
"The Alberta Tahitian Government can serve to slightly expand the WCS-Maya span, but we see it as a good thing because it should encourage producers to sign up for raw materials through rail treaties," Pardy said.
Western Canadian Select, which traded for a US $ 50 discount on the US currency West Texas Intermediate in October, cut the gap to less than $ 9 before Wednesday's announcement. This level would not include the cost of transporting oil by rail to the Gulf of the United States. Alberta cut supplies from Canada at the same time, with OPEC and its allies lowering exports.