As we reported last week, the volume of Alberta’s oil production is up at 3% higher over the first half of the year compared to the same six months in 2024. More output is positive economic news, but dollars also count, and on that front, prices are down.

Smoothing out the day-to-day price swings (which matter a great deal to producers, traders and consumers, but less so to economists trying to get a handle on the longer-term impact) by looking at quarterly averages, we find that oil prices* just had their worst three months since the start of 2021.

The average price in the second quarter of this year was 10% lower than in the first quarter and 21% lower than during the same period in 2024.

Well-above estimated Canadian break-even prices, the Q2 average of US$64 per barrel remains supportive of activity in the sector, but the lower price is still an issue because it reduces the pool of money available for spending by the sector and cuts into the amount of money taken in by the provincial government via royalties.

Prices so far this year have been subject to downward pressure in the form of increased OPEC+ supply and concerns about global demand in the face of protectionist U.S. trade policy. At the same time, the risk of supply disruptions and sanctions related to conflict in the Middle East, the Russian invasion of Ukraine and Iran’s nuclear program along with growing global consumption are applying upward pressure.

Our most recent forecast assumes these forces will remain in play with the West Texas Intermediate benchmark weakening slightly over the second half of the year and the annual average coming in around US$65 before slipping a bit more to $62 in 2026.

*Today’s Twenty-Four uses the West Texas Intermediate (WTI) benchmark as a proxy for other oil price movements.

Answer to the previous trivia question: The value of Alberta’s energy exports to Mexico over the first half of 2025 was $452 million.

Today’s trivia question: In what year was the West Texas Intermediate futures contract introduced?