Curtailment is working. That's the assurance of Energy Minister and Dunvegan-Central Peace-Notley MLA Marg McCuaig-Boyd as the Alberta government eases its limit on oil production for the next two months.

Industry output will be increased by roughly 75,000 barrels per day to 3.63 million, up from the January limit of 3.56 million. McCuaig-Boyd says the decision was made by looking at current levels of storage.

"We said from the beginning that we would look at this monthly to see and happily the storage levels are dropping down a little bit early so we can do this, and we'll continue to monitor things monthly."

The province says the storage glut has gone down by five million barrels to a total of 30 million barrels since the limit was announced in December 2018. Only 28 of Alberta's more than 300 producers are affected, as the first 10,000 barrels per day a company produces are exempt from the cuts.

Wednesday's decision came as oilfield groups and companies expressed their fears about potential job losses stemming from curtailment. McCuaig-Boyd says industry feedback didn't play a role.

"We discuss many things almost daily with industry, but we have been monitoring the storage levels and looking at how that plan's going. Happily, that storage has drawn faster than we anticipated so we're able to increase the production limits for February and March."

The government has also changed its formula for how much production each company has to cut under the limit. Starting in February, it will use each producer's highest level of production during their best single month from November 2017 to October 2018 as its baseline, instead of a company’s highest six-month average over the same time period.

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Alberta's energy minister says the province will do what it can to try to prevent any damage to oil and gas companies from the upcoming cut in production. Dunvegan Central - Peace Notley MLA Marg McCuaig-Boyd says the decision to curtail production by 325,000 barrels a day in January was made in consultation with industry, which will continue.

"We've set it up so if we've missed something or whatever we're going to try to work through those, try to come to a solution. Every company is different."

A 10,000 barrel a day exemption will also be in place for producers. Only 25 of the 378 active operators in the province produce more than that and will be affected.

Companies like Cenovus, Nexen, and MEG Energy have come out in favour of curtailing, while others like Suncor and Husky have been vocal against it. McCuaig-Boyd argues something had to be done to address a storage glut and gap in oil prices.

"At the end of the day, having this wide gap that we've seen and the lack of pipelines is hurting us and it's clear that if we had done nothing it would result in further job losses. We're doing our best to bring this back so we can keep more money here in Alberta."

While the initial cut in production works out to be around 8.7 per cent, it will be reevaluated monthly after three months. McCuaig-Boyd expects the backlog to clear up by mid to late-2019.

"Once we see that supply coming down we'll be able to back off and let things continue. This is a short-term solution; mid-term is getting some more rail cars and long-term upgrading our resources here in Alberta and also getting the [Trans Mountain] pipeline built."

The price difference between Western Canadian Select oil and West Texas Intermediate has been between $30 to $50 U.S. recently. At the end of the day Tuesday, WCS was sitting at $27.95 and WTI at $52.67.

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