There are a few trading days left in June, but the West Texas Intermediate (WTI) crude oil price benchmark is on track to average right around $70 per barrel in June which is close to where prices stood two years ago. (All prices in today’s Owl are in U.S. dollars.)

Although down from last spring and closing yesterday at under $68, WTI remains above the five year-average of approximately $53 per barrel set before the pandemic (March 2015 to February 2020).

The average for WTI over the first six months of 2023 will come in around $75 per barrel, down from over $100 per barrel over the same period in 2022.

Prices have eased since the first half of last year for a variety of reasons including the fading (but not disappearance) of concerns regarding supply disruptions due to the Russian invasion of Ukraine and slower global economic growth.

While we always stress that oil price dynamics can change rapidly and dramatically, ongoing commitments by OPEC to keep a lid on production and modest growth in global consumption over the back half of 2023 are expected to support somewhat higher WTI prices than what we saw in May and June.

Our current forecast is for WTI to average $76 per barrel this year and $74 per barrel in 2024.

If the WTI benchmark meets (or beats) these forecasts, the outlook for Alberta’s oil patch remains positive even as higher interest rates bite deeper into the economy.

Inflation and hiring challenges are also in play, but increased efficiency and growing production are helping Alberta’s oil patch stay competitive.

Answer to the previous trivia question: The E in OPEC stands for Exporting (OPEC = Organization of the Petroleum Exporting Countries).

Today’s trivia question: Which French economist from Napoleon’s time is known for his law of markets?