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As global oil futures traded at negative values for the first time Monday, Alberta Premier Jason Kenney called on the federal government to give the oil and gas sector an immediate cash infusion.
Futures for West Texas Intermediate, the benchmark price for North American oil, ended the day at minus US$37.63 a barrel, driven by oversupply concerns as storage facilities fill up and demand remains low amid the COVID-19 pandemic.
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Kenney renews call for oil and gas sector help from Ottawa as prices go to negative Back to video
“We need to understand that hundreds of thousands of Canadian jobs are on the line,” said Kenney at the daily COVID-19 update.
Production in Canada will need to be cut voluntarily by 400,000 barrels a day, or roughly 10 per cent, but that could go as high as 800,000, or 20 per cent of Canadian output, said Kenney. This is in addition to the roughly 300,000 barrels per day in production already cut through mandatory government curtailment.
If the industry is going to survive the next 18 months, Kenney said, it needs a $15-billion to $30-billion credit backstop at commercial rates.
