Alberta premier announces 8.7% oil production cut to increase prices

Alberta Premier Rachel Notley has announced a temporary 8.7 per cent oil production cut, or decrease of 325,000 barrels a day, in the production of raw crude oil and bitumen starting Jan. 1, 2019.

In an announcement Sunday evening, Notley said the daily cuts will remain in place until the 35 million barrels of processed oil currently in storage is shipped to market, likely by the spring.

The reduction will drop to an average of 95,000 barrels a day until curtailment ends at the end of 2019, when Enbridge's new Line 3 pipeline starts operating.

The Alberta government also expects to acquire locomotives and rail cars by the end of next year to transport 120,000 barrels a day.

Notley said the decision to impose mandatory curtailments was difficult, but necessary.

"In Alberta we believe that markets are the best way to set prices, but when markets aren't working, when companies are forced to sell our resources for pennies on the dollar, then we have a responsibility to act," Notley said, adding the government has "a responsibility to defend our province and to defend our resources."