Alberta Energy Minister: Oil price recovery will be gradual

In an interview with Energy Intelligence, Sonya Savage, Energy Minister of Canada’s hydrocarbon-rich province of Alberta said, the oil price recovery will be gradual.

Additional comments

“Producers in Canada’s hydrocarbon-rich province of Alberta have cut their oil production by more than 1 million barrels per day and those volumes will only be restored gradually once market conditions improve.”

“Behind the scenes, we’re talking to many companies and we believe it’s a million barrels a day that are actually off right now, and off voluntarily.” 

“With that amount coming off, that’s over a quarter of our production here in Alberta, where we’re actually curtailed already. We were curtailed going into the COVID-19 crisis, we were curtailed to about 3.81 million b/d under curtailment rules.”

 “Production will come back when market conditions dictate that it is profitable and that they can produce it at a profit. Right now, that’s not the case.”

“Conventionals is a little bit different. It’ll take a while for that [non-oil sands] production to come back on because there are really very few wells being drilled right now and a lot of the wells that were in production have been idled.” 

“There are signs of oil demand picking up in North America as businesses open and activity picks up again.”

“The biggest question is how much demand will come back on stream and how long it will take to clear out the glut of oil that’s still in our storage facilities right now before we see a higher price point. We could be in a better position by the end of this year.”