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Alberta oil production on the rise

Alberta oil production on the rise

Posted on: 9/18/2017 | Author: ATB Financial's Economics + Research Team

Canadian oil output is expected to rise by close to 300,000 barrels per day this year and by another 200,000 barrels per day next year to reach 4.95 million barrels per day in 2018, according to the International Energy Agency’s latest monthly oil report. A large part of this increase will take place here in Alberta and so far this year, oil production is on the rise.

Oil extraction in the province increased by nearly six million barrels (+7.6 per cent) from April to May. Compared to the last 12 complete months, extraction levels were 40.0 per cent higher than the previous 12 months (because of a shutdown of facilities last May due to the wildfires in the Fort McMurray region). Compared to May 2014 when oil prices were above $US 100 per barrel, extraction is still up (roughly six per cent).

Even though oil’s drop in price and its price fluctuations have caused economic hardship throughout the province, oil extraction in Alberta has remained stable over the course of the economic downturn. That’s because many producers have had to boost oil production to generate more revenue to cover their losses.

This story is not just isolated to Alberta, it’s the same across all of North America. The US has continued to pump oil near record highs as well. More production is the biggest determining factor for why oil prices have been pinned below $US 50 for a while. So, while Alberta, Canada and the US look to boost oil output, oil’s price is unlikely to mount higher.

Monthly crude production, graph

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