Possible ’emergency situation’ regarding the price of oil in Canada | CBC News
The CEO of Cenovus says that the problem of the oil price in Canada is reaching an ‘emergency situation’.
Likewise, the head of one of the biggest producers of tar sands in the country has expressed concern. In fact, he said that Canada’s oil price problems are reaching an “emergency situation”. In such a way that on Wednesday saw the call of his company to production cuts by a competitor.
What did the CEO of Cenovus say?
The CEO of Cenovus Energy, Alex Pourbaix, has expressed “it is a provincial resource and … we are giving it away for free” while also saying “Nobody is making money at this price and this is quickly becoming a situation of emergency in the economy “.
In addition, it is known that the value of Western Canadian Select is tracking approximately $ 40 per barrel less than the US benchmark. In fact, on Wednesday, it was $ 15.75 per barrel, compared to $ 56.18 for West Texas Intermediate. While Cenovus, based in Calgary, is blaming political setbacks for the failure to build oil pipelines, urging the province to take action.
Likewise, analysts have said that while many Canadian oil companies do not seem to achieve a break in prices. Being that some US refineries enjoy an “apogee” due to the price differential. Meanwhile, the executive vice president of Canadian Natural Resources, Steve Laut, has also spoken on the subject. He considers that if the whole sector stopped production, there would probably be a response from the market almost immediately because of the psychological effect of the news.
Similarly, some industry experts now expect that low prices for Canadian heavy oil may persist in 2020. Despite this, more space is expected in the export pipeline once the Line replacement project is completed. 3 of Enbridge in approximately 12 months.
It should be noted that some observers have noted that not all companies are affected in the same way and it would be difficult to get everyone to agree with the production cuts. Being that the big integrated companies would not be affected like the companies without refineries or other options for their oil productions.
Source: Tony Seskus | CBC News