Oil prices are rebounding from historic lows seen last year, but it might be a while yet before oil companies have full confidence restored in what has become a shakey system.
Brent crude is now trading at just under 70 dollars per barrel, and Newfoundlanders and Labradorians have noticed the change in price with steady week-over-week increases in prices at the gas pumps.
Rory Johnston, managing director and market economist at Price Street Inc., says the industry is coming out of the “worst” pandemic effects following a sharp drop in prices.
He explains that the drop in prices caused a lot of companies to go on the defensive and reduce spending, and those clawbacks are what’s driving the prices now as demand recovers.
In terms of what the price increases could mean for this province, Johnston says companies are still wary.
He says in the last year we have seen a $100 difference from the downside of prices to the upside – going from around negative $-40 last year to $70 this year. He calls that one of the largest rebounds in the oil industry’s history but notes that it’s very volatile – something that “spooks” a lot of companies.
Source: VOCM | This text was excerpted from the media outlet cited on March 17, 2021 and is provided to Noia members for information purposes only. Any opinion expressed therein is neither attributable to nor endorsed by Noia.