Energy groups say industry on the 'cusp' of recovery as oil prices surge
CALGARY -- As the price of oil continues to climb, energy industry groups say we could be rounding the corner towards recovery.
The price of West Texas Intermediate (WTI) climbed beyond US$64 per barrel at points on Thursday, up from US$45 a barrel in December.
"We are on the cusp of, hopefully, a recovery. Our economy nationally and provincially have taken a hit," said Tim McMillan, the president and CEO of the Canadian Association of Petroleum Producers (CAPP).
"Currently prices are higher than what we would have expected last year."
The Canadian Association of Oilwell Drilling Contractors (CAODC) says activity is about 35 per cent higher than initially forecast.
"All of this, of course, is a result of some growing optimism in the industry," said Mark Scholz with the CAODC.
But both McMillan and Scholz add they are "cautiously optimistic" about continuing the momentum, pointing out there is still global volatility in the oil and gas sectors.
Demand for natural resources is growing and supply globally remains somewhat low, some analysts say. On Thursday, the OPEC+ producer alliance decided to hold output steady.
"Here in Alberta, we're actually able to take advantage of that.," said Charles St-Arnaud, the chief economist for Alberta Central. "Our oil production is back to pre-COVID levels so actually we're benefiting probably much more than other on the recent increase in oil prices."
Alberta's provincial budget, released on Feb. 25, forecasted WTI to hover around US$46/bbl for 2020-21.