Canadian Industrial Outlook: Oil Extraction—Summer 2017

Prices Hold the Line—WTI prices are forecast to average US$52 per barrel in 2018 and US$55 in 2019. Although strong demand gains, tightening spare production capacity, and geopolitical concerns will put upward pressure on prices over the near term, these factors will be offset by high inventory levels across the developed world and a rebound in U.S. production.

NAFTA 2.0—As the renegotiation process for the North American Free Trade Agreement continues to unfold, there are several key issues that could impact the outlook for Canada’s crude oil extraction industry. Climate-change policies and their potential impact on trade competitiveness are another important issue for the oil extraction industry.

Oil Sands Emissions Cap—As part of Alberta’s Climate Leadership Plan, a cap on oil sands greenhouse gas emissions has been set at 100 megatonnes per year. While this is unlikely to be a serious impediment to the industry’s expansion until at least the mid-2020s, it will keep energy efficiency and climate-mitigation strategies at the forefront of firms’ strategic plans going forward.