Alberta’s oil production quota will increase by 25,000 b/d in May and another 25,000 b/d in June, the provincial government announced.

As of June 1 the Alberta quota will rise to 3.71 million b/d, an increase of 150,000 b/d since the government launched mandated reductions, with a January limit of 3.56 million b/d. The government in December announced a reduction of 325,000 b/d off the province's oil production that began Jan. 1.

"We're giving it away for next to nothing," Alberta Premier Rachel Notley said at the time. "Every Albertan owns the energy resources in the ground, and we have a duty to defend those resources."

The intervention continued to show the government’s desired effects of reviving Alberta oil prices, which fell sharply last fall following a supply surplus piling up behind full pipelines.

Alberta’s benchmark heavy crude, Western Canada Select, closed Monday at US$49.31/bbl or 16% less than the US$59.09/bbl close for West Texas Intermediate.

The discount was more than twice as deep before Alberta adopted production quotas. The main casualty was Canada’s top natural gas user, thermal oilsands production.

The provincial treasury stands to gain C$1.1 billion ($880 million) this year in royalties and taxes if the production cut hits its target of raising the average Alberta oil price by US$4.00/bbl.