Tides turning in Alberta’s oil industry
It’s not surprising that the March 2020 crisis in the oil and gas industry and the COVID-19 pandemic prompted a steep decline in oil and gas capital expenditures in Canada over 2020. Based on a report by the International Energy Agency (IEA 2021), at the peak of restrictions in April 2020, global oil demand was more than 20% below its pre-crisis levels. Overall, oil demand dropped by 9% throughout 2020 with the travel and mobility restrictions during the COVID-19 pandemic but good news is on the horizon.
Now, oil and gas exports and prices in Alberta are trending upwards, beyond pre-pandemic heights. After being adjusted for inflation, Alberta’s exports were 1.4% higher in the first 7 months of the year than they were prior to the pandemic. In the first seven months of 2021, our three biggest customers all bought more goods from us than they did in the same period last year. The U.S. exports rose 0.3% ($201 million), China’s sales increased by 8.0% ($213 million), and sales to Japan rose 37.7% ($126 million). Western Canada Select (WCS), the price obtained for many Alberta producers of oil, averaged US $58.80 a barrel in July 2021, 80.9% higher than it was a year earlier.
In addition to prices and exports, capital spending, which is a barometer for investment activity in the oil sands, is expected to increase by more than 33% in 2021 after a 20% decline in 2020. All of which is great news for Albertans – after many dark years, the tide may very well be turning in our direction.
The True Nature of AiM Land –
We are a full service land consulting firm with innovative and expert knowledge of the land. We offer expertise for a broad spectrum of major energy projects across Canada and the United States. We are a full-service broker that does all portions of a project internally; we do not outsource any part of the work. We utilize leading edge technology to reduce costs, improve communications, and ultimately deliver the project more efficiently and done for the best price. Our strong and dynamic team brings extensive knowledge from the field and varying experiences to each project.
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