Oil supply at near record highs, while prices remain low

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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.”

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