ATB Financial says oil production is getting back on track in Alberta.
The institution said between the pandemic, an oil price war, prices slipping into negative territory, ongoing pipeline challenges, lockdowns, travel restrictions and a second wave of the virus, the fact that Alberta’s annual oil production was down by “only” 5.1 per cent last year (65.4 million barrels) is a positive.
Oil production in the province was down on a year-over-year basis from April 2020 through October 2020, but rose above 2019 levels in both November and December.
Total output in 2021 should come in higher than its pre-pandemic level, but this assumes that vaccines put the pandemic on its heels and U.S. and global demand stays strong, the institution said.
“So far in 2021, oil prices have been bolstered by rising demand, the expectation that vaccination programs will be effective at curbing the pandemic and ongoing supply cuts on the part of OPEC+ producers. If the higher prices hold, they will elevate production levels and spur a faster recovery in Alberta. If, however, things go awry on the pandemic front or OPEC+ changes course, the opposite will happen.”