For example, OECD inventories are showing continued buildups, while current expectations are calling for US shale companies to help boost total production above 12 million barrels a day next year.
Alberta Premier Rachel Notley announced the production cuts "in response to the historically high oil price differential that is costing the national economy more than $80 million per day", her office said in a statement.
Western Canadian Select, the heavy oil benchmark in Canada, soared almost 37 per cent on the news, up to around US$30 per barrel, according to Bloomberg data, with the blend trading in the low $20 range below the USA crude, compared WITH $32 before the announcement.
At the end of trading on Monday, Cenovus Energy Inc. shares were trading at $10.99, nearly 12 per cent higher than their Friday close, while Canadian Natural Resources Ltd. closed at $36.58, up 9.55 per cent. Western Canadian Select (WCS) is the reference price for heavy crude oil from the oilsands delivered at Hardisty, Alta.
The meeting will also include Indigenous leaders.
Canada's largest oil and gas company, Suncor Energy Inc., said Monday its estimate of the impact of the provincial cuts will be provided when it issues its 2019 capital and production guidance.
Official U.S. government oil production and inventory data is due later on Wednesday.
The Pound-to-Canadian-Dollar rate was -0.60% lower 1.6807. Alberta said it will monitor the market closely and reductions will be adjusted accordingly as storage is drawn down or new transport capacity comes online.
"It shows that our regulatory system is broken and that we should have never have come to this", said chamber president, Sarah MacKenzie. Whatever its other impacts may be, taking immediate action to raise the price of Alberta crude by limiting supply is likely to see some results because it acknowledges the most basic law of economics.
The production curbs will provide some cushion for producers, but will not eliminate the discount on heavy Canadian oil that has persisted for many years, said Jihad Traya, manager at energy consultancy firm Solomon Associates LLC in Calgary.
"Pipelines only solve one component of this", Traya said. That's on top of mounting concern that the country's regulatory framework makes it very hard to get much-needed pipeline projects approved.
Notley said Prime Minister Justin Trudeau's government must do its part by rolling back proposed legislation that she says will make it much harder for energy megaprojects to be approved. Once excess storage is drawn down, the production cut will drop to roughly 95,000 barrels daily through the end of 2019.
The federal government has not yet decided whether it will contribute anything toward Alberta's purchase of new rail cars so that two more trains a day can transport crude from Alberta to refineries in Canada and the United States.
He lauded the province's market intervention, calling it a necessary step.
At least one oil company in Saskatchewan agrees with the provincial government's decision to not make cuts to oil production.