Oil supply at near record highs, while prices remain low
Posted August 24, 2015 12:34 pm.
Last Updated August 24, 2015 1:13 pm.
This article is more than 5 years old.
CALGARY (NEWS 1130) – Supply levels for crude remain at their highest level in roughly two decades. As a result we’re seeing some extremely depressed prices for oil and it’s so far showing no signs of a rebound.
President of the consulting division at Kent Group, Michael Ervin, says it’s hard to predict if there is a basement to this downturn.
“So much of what happens is a matter of policy. Most crude oil production in the world is actually controlled by national oil companies.”
Ervin says policies they take have a tremendous impact on what is going to happen to the industry as a whole.
He says the two things that would make a difference is an increase in demand and cutbacks in production or reducing supply.
The Calgary-based analyst adds some producers now are turning a profit, but the lower they go, the more non-conventional production is going to become unviable.
“Right now for most oilsands, and as well as fracking, there’s not a lot of money to be made.”