UTILITIES
watched global oil prices tank over the last year . In late 2014 , the price of oil plunged below $ 50 per barrel for the first time since 2004 . All that extra production from Canada , the United States and Russia flooded the market just as demand growth started cooling off in China .
The current prices are artificially low , according to most experts . Many analysts expect oil to climb back over $ 70 a barrel by the end of 2015 . Provided the price stabilizes , Canadian producers will be able to count on a healthy profit . If prices were to plummet again , however ,
some of the smaller producers could face serious cash flow problems . Future production growth would also decline if prices stay low .
Another factor counseling caution in the Canadian petroleum market is the issue of environmental objections . The tar sands projects remain controversial because the process of extracting and refining tar sand oil is much more polluting than conventional oil . The industry has largely overcome domestic protests to tar sand extraction , but the environmental lobby successfully persuaded President Obama to veto construction
‘ Canada ’ s natural oil wealth is larger than ever and extraction efforts already in progress all but assure profitability .’
8 May 2015