The oil and gas industry is the most important industry in our province; it is Alberta’s number one source of revenue. Aside from being crucial to our province, this industry is also crucial to our country, as Alberta is Canada’s top provider of natural resources.
While the recession that hit this industry and our economy so harshly over the last couple of years has come to an end, thank goodness, it is still going to be a slow recovery process. Although jobs that were lost are now being refilled and projects that were halted are being kick started once again, the price of oil remains relatively low, especially in comparison to the impressively high prices we were seeing before the recession hit in 2014.
A Look Back
Before the recession, our oil saw a peak price of just over $105/barrel. Unfortunately, however, this did not last, and the last half of 2014 saw a steep decline in the price of our crude oil. It looked promising heading into 2015, as it started to rise once again, albeit slowly, but took a turn for the worse as it dropped to the lowest it’s been in years, a mere $30/barrel, in February of 2016. Since this low point, the price has been on a relatively consistent, gradual climb upwards once again, where it now sits a bit above $50/barrel.
While large oil corporations are at an obvious disadvantage with the price of oil remaining so low, there are still people and organizations that will benefit from our current prices.
And The Winners Are…
This is a catch 22. While the low prices hinder the economy, which in turn negatively impacts everyone it some way, shape, or form, there are short-term benefits of low oil prices that Canadians can capitalize on.
The number one way in which consumers benefit from cheap crude oil prices is a reflection of this in the price of gasoline. Not only do individuals benefit by saving a few dollars filling their tank, but industries and business requiring gasoline will also benefit. Businesses that rely on the use of oil, such as transportation or goods production, will also be able to save on input costs.
Oilfield Support Companies
Secondly, companies that are in the business of supporting major oilfield companies, such as Apache, producers of pipeline pigging equipment, may also benefit from the price of oil remaining low.
Oil companies will be looking to save money, and a great way to do that is to ensure the most efficient and effective use of facilities and time. Pigging helps do this by keeping pipelines clean (providing optimal performance) and by taking information readings that can aid in creating even more streamline processes and equipment. Because pigging can help oil companies save money by keeping them running efficiently and effectively, they will be looking to purchase pigging equipment. This means that support companies such as Apache, who can provide these necessary tools, will benefit.
Until Next Time
Yes, there are short-term benefits to this persistently low price of oil, however, our country and our economy will benefit more as a whole as the prices rise. Luckily for us the price of oil has been on a consistent (although admittedly slow) rise since the beginning of the year, and is anticipated to continue on the upward path as the year passes.