The plunging price of a barrel of oil has the industry in North America and other parts of the world scrambling to cover costs.
At the World Heavy Oil Congress now underway in Edmonton, Alberta, those in attendance heard from ARC Financial Corp’s VP, Jackie Forrest that companies “are at the threshold or below where they need to be to see a profit.”
Forrest explained how there is currently an over supply of 1.5 to 2-million barrels a day. “It’s a lot, but only about half of what we experienced in 2009.”
She sees some possible solutions to the problem. “One is that there will be an increase in demand.
She sees some possible solutions to the problem. “One is that there will be an increase in demand. The second is that either North America or the OPEC Nations* will cut supply.” OPEC has made it clear it will not be doing anything to boost the price of oil.
As a result Forrest expects a volatile recovery that should see the price climb to the $60-65/bbl mark within a couple of years. Despite this she still thinks there will be growth in the Alberta oil sands.
*Organization of the Petroleum Exporting Countries (OPEC) is Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar, Libya, United Arab Emirates, Algeria, Nigeria, Ecuador and Angola.