Document Highlights
Market Fundamentals—After three consecutive years of oversupply, global crude oil markets are finally moving back into balance. Stronger demand in coming years will put some upward pressure on prices but, with still-elevated inventories, fewer unplanned production outages, and ample spare production capacity should be enough to keep these gains modest overall.
Profitability and Investment Levels—Although industry revenues are expected to benefit from both higher prices and rising output throughout the forecast, firms remain in survival mode in the near term as profitability remains elusive. Weak profitability over the past several years has strained firms’ cash flows. Therefore, investment in the industry is projected to remain weak for a number of years yet.
Pipeline Project Approvals—Conditional approval of Enbridge’s Line 3 replacement and Kinder Morgan’s Trans Mountain expansion projects is good news for the industry. What is more, the reset button was recently hit on Keystone XL by the new U.S. administration, adding market optionality for Canadian producers.
There are no reviews yet.