Rock versus Sand

28 Apr 2017:  American shale is back.  Production is going from strength to strength on the back of increased drilling activity and significantly reduced breakeven prices compared to 2014/2015.  Even at current prices, which are hovering around $50 per barrel, shale oil can be profitably extracted from fields in the United States.  As a result, the immediate future of shale oil production looks bright.  The situation for Canada’s oil sands is quite different.  Back in 2014, when oil prices exceeded $100 per barrel, Canadian producers were doing very well and both cash flow and capital spending in the energy sector reached record levels.  After oil prices collapsed in late 2014, investments were curtailed.  From 2014 to 2016, capital spending in Canada’s oil and natural gas sector declined by an estimated $50 billion, or 62%, the largest two-year decline since the Canadian Association of Petroleum Producers (CAPP) started tracking this data in 1947.  The numbers for 2017 are expected to show a small pickup in Canadian investment.  The diverging paths of these two key non-conventional sources of crude oil can have a significant impact on trade flows and tanker employment in the coming years. Please fill out the form to read the full article.