This report examines the short-and medium-term economic and profitability outlook for Canada’s oil extraction industry.
Canadian Industrial Outlook: Oil Extraction—Winter 2018
Canadian Industrial Outlook: Oil Extraction—Winter 2018
Industry Economic Analysis
$945.00
- Market Fundamentals—Global demand for crude oil is projected to increase this year. Supply growth will come primarily from non OPEC countries, as OPEC continues to curb production to support market pricing. Oil markets will remain balanced, with a supply overhang restricting near-term pricing.
- Back to Profitability—Prices are recovering, and Canadian production is rising thanks to the non-conventional sector. Cost increases are expected to be modest as the recent crisis has forced producers to become leaner. Higher production will outweigh increased labour costs and help the industry return to profitability this year.
- Pipeline Bottlenecks—As pipeline capacity cannot keep up with growing production, more oil has to be shipped by rail at a higher cost. This causes a high differential between Canadian oil prices and other global benchmarks, resulting in more than $10 billion in forgone profits this year. No relief is expected until 2019, when new pipeline capacity becomes available.
Customers Who Downloaded This Also Liked
10 min read
Require an accessible version of this research?
Upon request, The Conference Board of Canada offers accessible versions of research. Please contact us to request your accessible version.
Learn more about our accessibility policies.
