Cautious optimism in Alberta’s energy sector as oil prices rise – .

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Cautious optimism in Alberta’s energy sector as oil prices rise – .


CALGARY – The price of oil has slowed to rebound in Alberta as the pandemic eases.

For a sector battered by seven years of depressed prices and political defeats, an unknown emotion seeps into the offices of the oil field: hope.

“I would say in the Canadian sector it’s cautious optimism,” said Tim McMillan, president and CEO of the Canadian Association of Petroleum Producers (CAPP).

On Tuesday, the price of West Texas Intermediate (WTI) closed at just over US $ 73 a barrel. The last time it was close was in October 2018, when the price hit $ 75.

“This will mean very good revenues for the government, very good royalties higher than those provided for in the budget. But what we are seeing is that a lot of money is being reinvested in capital investments. In fact, we’ve had one of the weakest years of capital investment in the last decade, which isn’t traditional when we’re on the upward price cycle, ”McMillan said.

McMillan said there is also a prudence in Canada to invest, so companies have no demand for jobs right now.

“Every time you go from the lows that we were last year to something more normal, there’s a little bit of friction getting people back into the workforce. But we don’t see the high demand for jobs that we would traditionally have.

A RETURN TO $ 100 PER BARREL: B DE A

The Bank of America predicts that oil could hit US $ 100 a barrel next year as demand for air travel rebounds, although the average is around $ 75 a barrel.

Economists say the price has increased in recent months and that depends on supply and demand.

“This is most recently driven by the fact that vaccination efforts and reopening economies are proceeding a little faster than expected, so people expect demand for things like jet fuel and gasoline is up over the summer and voila. the price of oil rising, ”said Rob Roach, deputy chief economist, ATB Financial.

Roach said it was difficult to predict oil prices with so many changing factors, but he expects prices to stay around their current level until supply catches up.

He said the oil industry was trying to make up for lost revenue during the pandemic when demand was weaker.

“A lot of that extra income that’s pouring in really goes to fill in the holes that were created last year… if the price can stay that high, it will start to translate into more exploration and drilling, that’s there we get more economic activity, ”Gardon said.

The new CEO and President of the Petroleum Services Association of Canada said on the services side there was optimism.

“The service industry has been pretty lean over the past few years, six to seven years now, so there is optimism. But we also recognize that the industry has faced many complex challenges and that the service side has adapted and will continue to adapt, ”said Gurpreet Lail.

Lail said drilling activity is comparable to 2019 levels, so she hopes oil prices continue to rise to create more opportunities.

Gurpreet Lail takes the helm next week. She is currently the CEO and President of Big Brothers Big Sisters Calgary and Area. She said she hopes her vast and diverse experience will bring a new perspective to the organization.

“Whether it’s transforming the conversations and dialogues that take place in public forums with various stakeholders or government and just making sure we’re championing the service side to the best of our ability and that all the right work is done. as the service industry does in terms of technology, innovation is actually visible.

Lail said the industry is making innovative inroads in environmental initiatives, saying these topics need to be brought to the fore.

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