What life looks like 2 years after oil plummeted


tay
+1
#1
The last two years have been a mess for the energy sector. Tens of thousands of jobs have been cut, capital spending dove, drilling is expected to be at a 40-year low, bankruptcies are piling up and cash flow doesn't come close to cover spending.

But there are some (relatively) bright spots. One is around pricing: crude oil has been trading in the $45 to $50 US range for roughly two months and there's some confidence that the bottom is behind us.

"Looking forward with a reasonable set of assumptions, the market is set to balance in the second half of this year and continue to get better in 2017," said Jackie Forrest, vice-president of energy research with ARC Financial.

Last week, Burgess Energy did a deal with Calgary-based Athabasca Oil, in which it bought a stake in future royalties at the company's oilsands operations for $129 million. Those royalties will only be paid when oil is trading above $75 US a barrel — a price point barely dreamed about these days.

In order for the job market to hit bottom and then stabilize, the U.S. Federal Reserve estimated it would take oil prices holding steady at $50 US a barrel for two or three months. In Canada, it's expected that it will take more time than that for hiring to start.

The oilpatch cut 28,145 direct jobs in 2015, more than 10 per cent of the workforce, according to labour-tracking firm PetroLMI. Many of those cuts were in the service sector, which will take longer to recover than the exploration sector it serves.

"I hope we've seen bottom," said Mark Scholz, head of the Canadian Association of Oilwell Drilling Contractors. "Most are expecting that around the $50 range, it's at least stable and we're going to start to see gradual increases from there.

But Philip Verleger isn't convinced. The Colorado-based analyst called $50 oil a mirage caused by the outages; he expects oil to fall back to the mid-$30s in the near term.

Forrest agrees that oil inventories are a problem, as there are an additional 500 million barrels in storage in North America right now than is typical this time of year.

more

Oil at $50: What life looks like in the oilpatch 2 years after prices plummeted - Business - CBC News
 
taxslave
+1
#2
You would never know the bottom fell out of the market when you gas up your car.
 
Danbones
+1
#3
50 a mirage?
which explains why so many politicians are after that Damned carbon gouge

cheap readily available energy should be the wellspring of a roaring econonmy
 
tay
#4
Alberta economy still the best in Canada by some measures


Despite the hard times Albertans still earn far more than most Canadians, with Alberta's per capita GDP sitting at around $77,000 compared with about $53,000 for the rest of the country.

It is just one reason why University of Calgary economist Trevor Tombe says Alberta could still be Canada's best economy.

In many ways we are still the strongest economy in the country, we have a higher fraction of our population employed than any other province — our earnings are much higher than any other province even today, so it is important not to lose that perspective."

Of course that is cold comfort for the tens of thousands of Albertans left unemployed by the downturn. But Tombe says Alberta's
economy is more diversified than most think, with fewer than six per cent of workers being directly employed by the oil and gas sector.

And Tombe says that the number of people working in other sectors is growing as employment in oil and gas shrinks.

"Service sectors, health care, education — professional and scientific services — these are areas that are increasing their employment, so it is in areas like that where we are seeing a lot of the growth."

There is no doubt that Alberta has been battered by a harsh economic climate over the last two years but many believe that the worst of this latest downturn is likely behind the province.

In the end the silver lining to Alberta's longest and deepest recession ever, could be less about the damage done and more about how well the province has weathered that storm.


Alberta economy still the best in Canada by some measures - Calgary - CBC News
 
petros
+1
#5
Quote:

Alberta economy still the best in Canada by some measures


Despite the hard times Albertans still earn far more than most Canadians, with Alberta's per capita GDP sitting at around $77,000 compared with about $53,000 for the rest of the country

SK is at $70K per head.

I keep telling that to flossy. He just doesn't get it.

It would take 40% growth in ON just to catch up to SK.
 
mentalfloss
#6
It's easy when Saskatchewan has a population that you can count on one hand.
 
petros
+2
#7  Top Rated Post
And every last one of them produce 40% more.

Why?
 
taxslave
+1
#8
Quote: Originally Posted by petrosView Post

And every last one of them produce 40% more.

Why?

Difference between a progressive government and a socialist one.
Have to keep in mind that a lot of the jobs lost in Alberta were not Albertans but people from have not provinces that were in Alberta to work but took their money home.
 
petros
#9
The only person I know who lost a job in oil is a gal who worked for a mat rental company.
 
Curious Cdn
#10
Quote: Originally Posted by petrosView Post

The only person I know who lost a job in oil is a gal who worked for a mat rental company.

I have a couple of drillers in the family that are dping "other" things, right now ... maybe permanently.
 
petros
#11
Drillers or rig hands?
 
Curious Cdn
#12
Quote: Originally Posted by petrosView Post

Drillers or rig hands?

One is "the boss" ... exploration driller and the other is his son.
 
taxslave
#13
Quote: Originally Posted by petrosView Post

The only person I know who lost a job in oil is a gal who worked for a mat rental company.

I got two friends here that are home. Neither wants to go back as long as they can earn a living of sorts here.
 
petros
#14
Quote: Originally Posted by Curious CdnView Post

One is "the boss" ... exploration driller and the other is his son.

A driller is a position.

Quote: Originally Posted by taxslaveView Post

I got two friends here that are home. Neither wants to go back as long as they can earn a living of sorts here.

Operators?
 
taxslave
#15
Quote: Originally Posted by petrosView Post

A driller is a position.



Operators?

Both worked in well services. Not real sure what. Both drive truck and know how to make **** happen.
 
Curious Cdn
#16
Quote: Originally Posted by petrosView Post

A driller is a position.



Operators?

I'm not in the oil industry. I don't know the minutae of your jargon. He leads a crew that drills exploratory holes , looking for oil. You can call him whatever the hell you want to.
 
petros
#17
He does wildcat? Nobody does that anymore. Not for a decade or two. That explains everything.
 
tay
#18
Making money and holding onto it also entails getting out of deals when the time comes. And that time has come for Norse oil giant, StatOil, in Athabasca (link is external) (external - login to view). The company has announced it'll take a 550-billion USD loss to sell off its assets in the Athabasca Tar Sands.

The international company, which has operations in 37 countries, with about 21,000 employees worldwide, said the decision was about reducing costs as well as cutting its greenhouse gas emissions.

 
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