Producers’ brinksmanship has worked, and Canada is cutting production
In the battle to see who blinks first, OPEC hasn’t blinked. And it looks like it isn’t going to, as it meets this week in Vienna.
Six months ago the Organization of the Petroleum Exporting Countries, led by Saudi Arabia, announced it would keep pumping crude even though the world was swimming in the stuff.
While some analysts are predicting a surprise at this week’s meeting, most reports now say OPEC is not considering reining in production.
- Global glut grows to two million barrels a day as OPEC pumps more
- Canada’s crude production falls to nearly two-year lows, says Barclays
And whether or not OPEC continues to pump, there are new signs that Prime Minister Stephen Harper’s dream for Canada as an “emerging energy superpower” may be in trouble.
A report this week from Barclays showed Canadian production tumbling. The global giants with a stake in Canada’s oil sands have stopped expansion plans and many have walked away.
Meanwhile, Alberta oil producers have threatened to put new developments on hold until they see whether Rachel Notley’s new NDP government gives them what they want.
Missing a crucial window
To add insult to injury, low prices have emboldened the “dirty oil” lobby. There are new reports this week that the New York oil hub is rejecting petroleum from Canada’s “tarsands.”
Alberta’s oilsands may still contain some of the world’s largest petroleum reserves, up there with Venezuela and Saudi Arabia, but there is an increasing danger that Canada has missed a crucial window to develop and extract those resources.
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