With there being light at the end of the tunnel in regards to COVID-19 via vaccine rollouts, the world is eagerly anticipating when they can begin normal lives and travel the world once again.
With spring and summer around the corner, this anticipation and growing demand is going to require lots of oil and gas services and products, and it begs the question, is there going to be another oil boom? These factors offer a wonderful remedy for the once-beleaguered industry.
As the world recovers from the shock and horror of the pandemic, oil prices are also recovering from historic lows and supply cuts to hovering around $70, causing a cautious optimism and the return of high and sustainable prices.
The industry, famous for its boom-and-bust cycles, may need to start producing more oil to keep up with this aforementioned demand.
From EIA’s website and short-term energy outlook, the OPEC+ extension of existing supply cuts through April added significantly to near-term upward oil prices.
Via Deloitte’s 2021 oil and gas industry outlook, demand is expected to recover strongly but remain lower than it was pre-COVID-19 levels, though things could change for the better.
Looking further down the road, McKinsey’s global oil supply and demand outlook to 2040 states the sector will require new production of nearly 23 MMb/d to meet demand after 2030. Even as rumblings and transitions towards renewable energy make their waves, the world still requires oil and gas products for their day-to-day lives (as does the renewable industry).
These climbing market prices could be music to Alberta’s ears, who unveiled their budget in February with conservative oil prices and tempered expectations around oil prices.
Though major projects such as Northern Gateway and Energy East have been skidded, there are Trans Mountain and Coastal Gas Link are underway and take on added importance.
There is a real opportunity for Canada’s oil and gas to grab a bigger piece of the global market share pie. This access to market is critical for the country’s economic recovery and would complement a potential boom. It creates jobs and ensures Canada receives value for its energy products.
As both the world and oil industry break free from the grips of COVID-19, the growing urge for normalcy creates increased demands for oil and gas services and products. A potential boom could be on the horizon.