The price of crude has collapsed once again, despite OPEC and its allies agreeing to cut their combined oil output by 1.2 million barrels daily commencing in January 2019 to rebalance global energy markets. After reaching a multi-year high of over US$76 per barrel in early October 2018, the North American benchmark West Texas Intermediate (WTI) has plummeted to around US$45 a barrel. Regardless of OPEC’s promised cuts, there are signs that crude could soften further in coming weeks, because of a sluggish global economic outlook and growing oil production. This is bad news for Canada’s beaten-down energy patch, which — after a brief glimmer of hope — has been weighed down by the deep discounts applied to Canadian oil and natural gas benchmark prices and sharply weaker crude. U.S. oil production is expanding rapidly Activity in the U.S. energy patch continues to grow at a frenetic pace, despite oil’s latest collapse. The latest U.S. rig count for the week ending December 21 shows that the number of active rigs grew by nine compared to a week earlier to 1,080. This is 149 rigs greater than for the same period in 2017 when WTI was trading at US$58 a […]
