News of Global Oil Production Reduction Agreement Finalized in Canada

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OTTAWA –
Announcement that an agreement has been finalized by OPEC and other oil-producing countries to reduce production by nearly 10 million barrels per day is welcome in Canada, where the provinces have lost revenue drastic due to crude prices.

” It’s good. We welcome any news that brings stability to world oil markets, “said Natural Resources Minister Seamus O’Regan on Sunday.

The deal between the deal, Russia and other countries came late last week and followed a supply battle that started last month when Russia refused to cut production due to the drop in demand due to the COVID-19 pandemic, which prompted Saudi Arabia to increase its oil production and reduce its price.

Videoconference negotiations took place last week, which were attended by representatives of the Alberta government.

Alberta Premier Jason Kenney, who commented on the negotiations on Saturday and hopes for their success, said his province had not been asked to restrict production.

“We have been very clear in signaling to OPEC, the United States and other countries around the world that Alberta has already cut production in the past 15 months and that we cannot really influence the world prices because we don’t have access to the world market. “We don’t have these pipelines to the coast,” Kenney told reporters during a conference call on the response to the pandemic in Alberta.

“Even if we wanted to increase production, we would be capped at around four million barrels a day that we could ship via existing pipelines and crude oil by rail,” he added.

The deal, which was finalized on Sunday, would allow Mexico to cut only 100,000 barrels a month, which was a sticking point after last week’s talks.

Mexico’s energy minister tweeted that the group of nations had agreed to cut 9.7 million barrels a day to start on May 1, and energy officials from other countries shared similar information on Sunday.

O’Regan, who participated in a conference call with G20 energy ministers on Friday, declined to speculate on whether Canada could consider cutting production as part of the broader multilateral effort , but said that it is no secret that production has dropped in Newfoundland, Alberta and Saskatchewan.

Prime Minister Justin Trudeau also did not say on Friday whether Canada would take steps to reduce production, although he noted that Alberta has already reduced production and that Canada “will continue to seek ensure that other countries do their part ”.

O’Regan said Sunday that Canada is committed to price certainty and economic stability.

“The federal government is deeply concerned about the volatility of oil prices and its impact on thousands of Canadian energy workers and their families,” said the email.

Kenney chastised on Saturday the “reckless actions of the Saudis and the Russians” which he said have inundated world stocks to the point that extremely low prices will continue for at least 18 months.

“There is simply no coating,” he said, adding that he was awaiting news of the federal plan to help the energy industry.

O’Regan said last week that the long-awaited bailout would contain measures to improve “liquidity” in Canada’s energy sector and will arrive soon, but he did not say when.

This report from The Canadian Press was first published on April 12, 2020.

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