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 /MonthMonthly Cut Needed To Stop Over Supply + Drop Existing Inventory to 20 M barrelsDaily Production Cut To Hit TargetOver Production /Day
Jan 20195,700,0006,950,000231,667190,000
Feb5,225,0006,475,000215,833174,167
Mar4,750,0006,000,000200,000158,333
Apr4,275,0005,525,000184,167142,500
May3,800,0005,050,000168,333126,667
Jun3,325,0004,575,000152,500110,833
Jul2,850,0004,100,000136,66795,000
Aug2,375,0003,625,000120,83379,167
Sep1,900,0003,150,000105,00063,333
Oct1,425,0002,675,00089,16747,500
Nov950,0002,200,00073,33331,667
Dec475,0001,725,00057,50015,833
Jan 202001,250,00041,6670
Over Production37,050,00053,300,0001,235,000

 

Daily Production Cut To Hit Target
Jan 2019231,667
Feb215,833
Mar200,000
Apr184,167
May168,333
Jun152,500
Jul136,667
Aug120,833
Sep105,000
Oct89,167
Nov73,333
Dec57,500
Jan 202041,667

 


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