A price rally that has taken the West Texas Intermediate benchmark into the mid-$50 range is good news for the Alberta economy, says ATB Financial.
WTI closed on Feb. 2 at $US 54.76. Meanwhile, the Western Canadian Select heavy oil benchmark closed at $US 43.50 — the highest close since September 2019.
“There are always lots of moving parts working behind the scenes, but the rally has been driven by the expectation that coronavirus vaccines will lead to increased global oil demand and that supply limits set by the OPEC+ cartel will be maintained. Falling global storage levels are also helping to shore up prices,” said ATB Financial.
So far it’s been a mixed bag of news for Alberta’s oilpatch.
“On the bright side, capital investment and drilling activity are expected to be higher this year. Work has been continuing on the Trans Mountain pipeline expansion project, but its completion is still not a slam dunk. The same is true for the Line 3 replacement project. Then, of course, there was the cancellation of the Keystone XL pipeline project by President Biden.”
But ATB Financial said efficiency improvements, new technology and consolidation, means the industry is well-positioned to be more competitive than it was five years ago. Unfortunately, that also means relatively fewer workers are needed to get the job done.