How Much Alberta Oil Will Not Be Produced in 2019 as a Result of the Over Supply and Mandatory Curtailment

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Most pundits say that by the end of 2019 the market would clear itself but the Alberta Government wants to clear the over supply and reduce the current massive oil inventories from about 35M barrels to somewhere near it norm of 20M barrels.

So in an ideal world, both the 190,000 barrels per day that is being added to current inventory AND 15M extra barrels of oil in storage would all be gone by December 2019.  If we drop 1.25M barrels per month to clear the existing inventory and we eliminate the 190K barrels on a straight line calculation, the market would need to cut production by 57M barrels in 2019:

Over Production /Month Monthly Cut Needed To Stop Over Supply + Drop Existing Inventory to 20 M barrels Daily Production Cut To Hit Target Over Production /Day
Jan 2019 5,700,000 6,950,000 231,667 190,000
Feb 5,225,000 6,475,000 215,833 174,167
Mar 4,750,000 6,000,000 200,000 158,333
Apr 4,275,000 5,525,000 184,167 142,500
May 3,800,000 5,050,000 168,333 126,667
Jun 3,325,000 4,575,000 152,500 110,833
Jul 2,850,000 4,100,000 136,667 95,000
Aug 2,375,000 3,625,000 120,833 79,167
Sep 1,900,000 3,150,000 105,000 63,333
Oct 1,425,000 2,675,000 89,167 47,500
Nov 950,000 2,200,000 73,333 31,667
Dec 475,000 1,725,000 57,500 15,833
Jan 2020 0 1,250,000 41,667 0
Over Production 37,050,000 53,300,000 1,235,000

 

Daily Production Cut To Hit Target
Jan 2019 231,667
Feb 215,833
Mar 200,000
Apr 184,167
May 168,333
Jun 152,500
Jul 136,667
Aug 120,833
Sep 105,000
Oct 89,167
Nov 73,333
Dec 57,500
Jan 2020 41,667

 

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