The precipitous drop in the price of oil has been more sudden and dramatic than even the best forecasters had predicted. The Canadian Energy Research Institute is an independent, not-for-profit research establishment created through a partnership of industry, academia, and government in 1975. In October CERI predicted $79 US oil in QIV and $76 on average in 2015.
Oil closed today at $59.14 per barrel, well below the ‘low base case’ scenario in CERI’s latest report.
Production in the U.S. expanded to 9.12 million barrels a day through Dec. 5, data from the Energy Information Administration shows. That’s the fastest rate in weekly records that started in January 1983, according to the Energy Department’s statistical arm. OPEC, which supplies about 40 percent of the world’s oil, maintained its output quota at 30 million barrels a day at a Nov. 27 meeting, resisting calls from members including Venezuela to reduce the target.
In 2013, the Alberta economy grew strongly by 3.9%. Alberta has led all provinces in economic growth over the past 20 years, with an average annual GDP growth of 3.5% per year. Private sector forecasts suggest that Alberta is poised to lead the country in both 2014 and 2015. In 2012, Alberta’s GDP per capita was $80,200, the highest level of any province or state in North America.
The sudden downdraft in oil prices will cut economic growth prospects in the oil sands, yet few announcements have yet been made. Companies are adjusting to the new reality of sub-$60 oil.