Alberta Set For Wildfire Relief As Oil Firms Shut Output

Canada's oil and gas producers shut down some production after Alberta was hit by an unprecedented wildfire season, although rain and cooler weather are expected to bring some relief on Monday.

The country's main oil-producing province declared a state of emergency on Saturday due to wildfires, shutting production of at least 185,000 barrels of oil equivalent per day (boepd), or about 2% of total Canadian output, and displacing nearly 30,000 residents.

The shut-ins looked temporary and have had no immediate impact on energy prices, said Mark Oberstoetter, head of Americas upstream research for consultancy Wood Mackenzie.

Canada is home to the world's third-largest reserves, and most of these are in northern Alberta's vast oil sands.

More than 100 wildfires are still active, with more than 30 classified as out-of-control.

A mix of cooler temperatures and rain is forecast, which authorities hope will help contain the situation.

"We're crossing our fingers. We need rain big-time," said John Kokotilo, fire chief for Lac La Biche county, adding that his volunteer firefighters were getting exhausted.

Some 80 firefighters arrived from Quebec and Ontario to help efforts, with more expected to arrive from other provinces.

"People have called this season certainly unprecedented in recent memory because we have so many fires so spread out," Christie Tucker spokesperson for Alberta's wildfire agency said on Sunday.

NuVista Energy said on Monday it had temporarily shut in about 40,000 boepd as a precaution.

Production by the companies is expected to be restored once the wildfires come under control, as there are so far no reports of significant damage to infrastructure, BMO Capital Markets said in a note.

On a daily basis, Canadian natural gas exports to the United States fell to 6.7 billion cubic feet per day on Sunday, their lowest since April 2021, according to data provider Refinitiv. It was not immediately clear how much of the drop was fire-related.

Alberta Premier Danielle Smith is scheduled to speak to Prime Minister Justin Trudeau on Monday.

A 2016 wildfire in the Alberta city of Fort McMurray devastated some 1,600 buildings and put another 19,000 under threat of collapse, making it one of Canada's worst.

Insured losses from the Fort McMurray fires were estimated at C$3.6 billion ($2.7 billion).

In neighboring British Columbia, several communities remained under evacuation orders after heavy rain last week and flood warnings stayed in place.

($1 = 1.3319 Canadian dollars)