Oil prices skid with global stock markets; US supply swells

The meeting was called to hash out legal directives to give the Alberta Energy Regulator the power to direct oil producers to cut production by 8.7 per cent starting January 1.

Notley announced Sunday that next year Alberta producers would see a reduction of about 325,000 barrels per day (bpd) in order to address a brutal oil price differential.

The price differential between Western Canadian Select and West Texas Intermediate has fluctuated in recent weeks, peaking at around C$45 a barrel.

The Financial Post reports Western Canadian Select ended trade at US$29.95 a barrel, after on Friday it closed at US$21.93 a barrel.

About 25 Alberta producers are expected to be impacted by the cuts until the 35 million barrels of oil now in storage are shipped out of the province.

Dan McTeague with GasBuddy.com says B.C. drivers shouldn't be anxious about to fill up their vehicles because our gasoline is made up of a blend of many different oils.

In an emailed statement, the company said that while it will comply with the production cuts in Alberta, it doesn't think it's the right call.

DePratto expects the production cuts to reduce Canadian real GDP growth by between 0.1 per cent and 0.2 per cent in 2019.

Shares of Canadian oil producers are skyrocketing on Monday, led by Canadian Natural Resources (NYSE: CNQ), Cenovus Energy (NYSE: CVE), Baytex Energy (NYSE: BTE), and Crescent Point Energy (NYSE: CPG), which were all up double digits by 10:00 a.m. EST. It ends on December 31, 2019.

For example, OECD inventories are showing continued buildups, while current expectations are calling for US shale companies to help boost total production above 12 million barrels a day next year. "Less economic production was being curtailed and differentials were narrowing as a result of market forces", the company said in a release early Monday.

"That said, we understand the actions being taken in Alberta and will be working with our industry partners to ensure Saskatchewan is not undermining these efforts". Alberta's oil is now fetching bargain basement prices thanks to a growing glut and lack of pipeline capacity to get oil to market.

"This is meant to be a short term fix to a very, very long term problem that has been in the making for years and years and years", he said.

"With the government stepping in the way they did, companies are going to be far more inclined to have significant capital programs in 2019 so they can be ready to move that oil in 2020", said Alex Pourbaix, chief executive of Canada's third largest oil producer, Cenovus Energy.

The federal government has not yet decided whether it will contribute anything toward Alberta's purchase of new rail cars so that two more trains a day can transport crude from Alberta to refineries in Canada and the United States.

She adds that the curtailment of oil production in Alberta isn't something new either.

"This should be the responsibility of our federal government to get pipelines built in our country so we can get our products to market". "They're not as big a player as us but they're still a player", McCuaig-Boyd said.

MacNaughton notes the production cuts are not universally loved within the industry and some unhappy players are likely in the ear of the USA administration.