#Conference Board of Canada, #Canada's Oil industry, #MarketAccess, #Enbridge's Line 3 replacement, #Kinder Morgan's Trans-Mountain expansion, #The Keystone XL and Energy East
The Conference Board of Canada had predicted on Monday that Canada's oil industry would lose money as a whole in 2017, media reports said.
Carlos A. Murillo, board economist said that this loss due to an increased global demand of oil and its continuous spike in price could result in Canadian oil companies to lose a cumulative $1.1 billion Cdn before taxes in 2017.
Compared to last year's loss of $8.6 billion, the situation this year had improved but figures are still concerning.
There would be an increase of Global oil demand by two million barrels a day this year, much more than an expected growth in supply of 1.3 million barrels.
The above figures reveal that there will be an increase in oil prices and consequent decrease in profit in the oil industry.
Drop in oil prices in year 2014 was due mainly to oversupply of oil but this year’s demand for oil far exceeds its supply with consequent increase in oil prices.
The increase in the price of oil from $40 a barrel in 2016 to over $50 to $55 a barrel for most of 2017 will spike to $71 a barrel by 2021.
Pipeline developments projects such as Enbridge's Line 3 replacement and Kinder Morgan's Trans-Mountain expansion projects would add a million barrels a day and The Keystone XL and Energy East projects would add another two million barrels of capacity to Canada's pipeline network which would promote the marketing of these products.
Pipeline developments projects, no doubt offer optimistic signs of oil sector growth, but the truth is there is a great need for new capacity at present, and increased access of products in the market and better prices for the industry would take considerable amount of time to materialize.
(Reporting by Asha Bajaj)
Image Canada’s Oil industry: Wikipedia