Failure to Reverse Megaproject Lull May Lead to Oil Price Spike
Thursday, August 23, 2018
Another oil price spike could be on the horizon due to a pullback of investment of major projects through the downtown. Daily Oil Bulletin’s Maurice Smith sat down with Sproule experts Christoffer Mylde, VP Corporate Development and Liam O’Brien, Petroleum Engineer and Market Analyst to discuss global crude oil demand and supply and highlight opportunities and challenges the Canadian industry should consider in meeting future demand.
The article highlights:
- Crude oil demand has been very strong and outperformed market expectations throughout the downtown, consistently maintaining growth between one and two million barrels of daily production annually.
- Contribution to production growth from megaprojects has halved, significantly impacting the ability of the market to meet demand growth.
- We are entering a new era where the geopolitical risk premium is helping to support a price environment for investment into expansion projects in the Canadian oilsands.
- Post-2020, electrification fo now oil-consuming sectors is a looming disruption, with electric vehicle adoption the first significant oil demand disruptor, with single-use plastics having an effect on crude oil demand.