Oil and gas spending still bullish
Over the first three quarters of the year, spending was up by $9.5 billion relative to 2021
By Siddhartha Bhattacharya, ATB Economics 5 December 2022 1 min read
Despite the headwinds blowing against our economy, capital spending in the oil and gas extraction sector is at the highest level since the fourth quarter of 2017.
Seasonally-adjusted capital expenditures in Canada’s oil and gas extraction industries expanded for the seventh straight quarter to reach $9.9 billion in Q3 2022, up by $561 million (+6.0%) from the previous quarter.
Oil prices lost ground during Q3, but were still high enough for energy companies to retain a bullish investment program.
Over the first three quarters of the year, spending was up by $9.5 billion (+55.3%) relative to 2021 and $10.3 billion (+62.5%) above the 2020 level.
The national oil and gas extraction sector is clearly on strong footing with commodity prices still elevated and production holding at record levels. It is, however, important to highlight that global energy market conditions remain extremely volatile due to the ongoing Russian invasion of Ukraine and other factors.
With that said, the higher energy prices create both the capacity and incentive for more capital spending and ATB’s latest economic forecast predicts an uptick in oil and gas investment next year as well.
Answer to the previous trivia question: Unemployment Insurance was renamed Employment Insurance in 1996.
Today’s trivia question: A private enterprise since the 1990s and now a subsidiary of Suncor, In what year was Petro-Canada created as a Crown Corporation of the federal government?