Chris Varcoe: While curtailment has kept western Canadian oil prices from plunging again, it has also pushed new oilpatch spending to the sidelines
The engine of the Alberta economy has been throttled back for the past 12 months because of government-imposed limits on oil production, but Premier Jason Kenney expects that “bitter pill” will come to an end in 2020.
While curtailment has kept western Canadian oil prices from plunging again, it has also pushed new oilpatch spending to the sidelines. In November 2018, U.S. benchmark crude prices averaged almost $57 a barrel, while Western Canadian Select oil sat at just $11 — a steep discount of $46 a barrel, according to provincial government data.
“I wish there hadn’t been a slowdown in capital spending, but my sense is it’s better than the alternative.” In November, the province also announced changes to allow producers to pump more oil if they add incremental crude-by-rail shipments. “We are going to be up several hundred thousand barrels per day, even before we get to the full commissioning of the Line 3 replacement” in the U.S., the premier said.
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