Although Canada's oil producers are expected to benefit from both higher prices and rising production, profitability will remain elusive for the industry with losses expected for the third year in a row, according to The Conference Board of Canada's latest outlook for the industry. Pre-tax losses in Canada's oil extraction industry are projected to reach just over $1.1 billion this year.
"Following three consecutive years of oversupply, global crude oil markets are finally moving back into balance. Global demand is expected to increase in coming years, suggesting that prices will continue the upward trajectory that began late last summer," said Economist Carlos A. Murillo, Economist. "Despite recent positive developments, however, we do not expect the industry's bottom line to return to positive territory until the fourth quarter of this year given that it started from such a weak position."
Pre-tax losses in Canada's oil extraction industry are projected to reach just over $1.1 billion this year, following over $8.6 billion in losses registered for 2016.
At just over $22 billion, or about a third of 2014's peak levels, industry investments "will continue to be weak as a result of constrained cash flows and the winding down of a handful of large capital projects."
North America's light sweet crude benchmark, West Texas Intermediate, is estimated to average US$55 per barrel this year.
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