Analysts say a combination of weak demand for crude and simultaneously ballooning production from Libya and Alberta is dragging down the price of oil.
Suncor Energy Inc. said last week it would raise production at its Fort Hills mine in 2021 and is making improvements at its Firebag site to squeeze out more capacity. The company’s production could rise 10 per cent in 2021, Little said, from expected total 2020 production of 680,000 to 710,000 barrels of oil equivalent per day.Article content continuedPhoto by Ben Nelms/Bloomberg files
The additional Libyan barrels might not have had such a large effect on global oil markets in a normal year, but lacklustre oil demand as a result of the coronavirus pandemic and a fresh wave of lockdowns in Europe turn small changes in oil supply into large swings in oil prices. “If we’re able to revert back to the US$40-level, I think that’s the best scenario,” Tran said. Next year, Tran expects global oil prices to trend in the US$40-per-barrel range for the first half of the year but climb into the US$50 range at the end of the 2021.Article content continuedDaily output has reached 800,000 barrels per day and the country is targeting 1.3 million by the beginning of 2021, said Mustafa Sanalla, the chairman of Libya’s state-run National Oil Corp.
The final quarter of 2020 was when most analysts had expected to see “substantial stock draws” from oil in storage but lower-than-expected withdrawals mean the oil price improvement that was expected in the fourth quarter is being pushed back to next year.Ian Nieboer
Show me an analyst that’s been right this year!
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