Alberta's Alberta increases crude production limit for May and June

CALGARY, Alberta (Reuters) – Canada's oil province, Alberta, will raise crude oil production limits by 25,000 barrels a day in May and 25,000 barrels a day in June, the government said on Monday. .

These increases mean that in June, oil companies will be limited to 3.71 million bpd of production.

Alberta has imposed production cuts this year to reduce the congestion of export pipelines, resulting in a bottleneck in storage crude oil and a reduction in Canadian heavy crude oil to record levels. .

"This temporary policy played a crucial role in reducing the oil price gap, as we continued our medium-term plan to ship more oil by rail and badume the long-term burden for oil. new pipelines, while striving to ensure that the resources held are fully valued by all Albertans, "Premier Rachel Notley said in a statement.

The government said the increase in production limits comes as warm weather reduces the amount of diluent needed to help oil sands bitumen run into pipelines, increasing capacity.

Thinner is any ultra-light hydrocarbon mixed with viscous bitumen to allow it to drain.

The government said setting production limits two months in advance gave the energy and markets sector greater certainty when making decisions.

Some producers like MEG Energy (MEG.TO) supported reductions as this resulted in higher prices, but integrated producers, including Suncor Energy, criticized it (SU.TO) and Imperial Oil (IMO.TO) whose refining activities benefited from cheap crude oil.

Critics have also criticized the government for rendering crude oil shipments unprofitable and adding to the volatility of the Canadian crude market.

On Friday, Imperial canceled a $ 2.6 billion oil sands project in northern Alberta, due to uncertainty caused by the oil sands. government intervention in the market.

Alberta is leasing 4,400 cars to ship 120,000 b / d of crude oil out of the province and will ease pipeline congestion with first deliveries scheduled to begin in July.

The latest increase in the production limit comes the same day that Alberta opened its last session before a provincial election that, according to polls, will see the left-wing government of Notley cede power to the United Conservative Party.