According to the government, production capacity in Alberta now exceeds transportation capacity by 190,000 barrels a day, and there are 35 million barrels of crude in storage, double the normal level.
Brennock went on to predict that "Against this backdrop, the most likely outcome of next week's OPEC meeting is a fudge: Russian Federation and Saudi Arabia will agree to curb production, but by less than is needed to prevent a supply imbalance in early 2019".
Russia's Vladimir Putin and Saudi Arabia's Mohammed bin Salman may discuss oil supplies at the summit in Argentina.
Peter Kiernan, lead energy analyst at the Economist Intelligence Unit, added, "OPEC is grappling over how to manage the expected weaker fundamentals in the oil market next year, yet the uncertainty about what the group will do at its meeting next week is causing markets to be more anxious". Saudi Arabia is pumping as much as 11.2 million barrels a day, though it has said it supports a drop in output and has pledged to reduce monthly exports by 500,000 barrels a day in December.
Saudi Arabia in particular faces a hard choice: whether to cut production and support prices that have fallen to $50 a barrel, at the risk of angering U.S. President Donald Trump.
"Markets will be watching how OPEC will grapple with multiple threats to their efforts to keep prices buoyant", says Peter Kiernan, a lead energy analyst at forecasting and advisory services provider Economist Intelligence Unit. Yet the view that the oil market is oversupplied is a signal the cartel is laying the groundwork for action.
Oil prices had their weakest month in more than 10 years in November, losing more than 20 per cent as global supply has outstripped demand. Brent hit a a four-year high of $86.76 a barrel in early October before slumping to $58.71 on Friday.
The price of a barrel of Brent crude in February was $60,23 (+0,53%). Oil trading has been volatile over the last week as traders took positions ahead of the OPEC gathering. "However, there's concern that the cuts will not be big enough and also that the message may be intentionally unclear, in order not to get President Trump upset". Prior to the collapse in oil prices, the kingdom was responsive to Trump's demands. The cable broadcaster reports that US crude oil prices have crashed nearly 26 per cent from their peak in October as fear of a shortfall in supply has turned into talk of a glut.
That growing belief saw oil prices trim early falls on Friday. However, WTI prices lost 20.9% in November.
Bigger picture, Brent was down about 12% so far this year, as surging oil production in the U.S., Russian Federation and among key members of OPEC has helped to create a glut in global markets. Off-topic, inappropriate or insulting comments will be removed.