Oil prices are at the lowest they have been in several years, currently trading at $75 a barrel.
President of the Grande Prairie Petroleum Association Rob Petrone says there is an over supply happening right now, spurred on particularly by high production levels in Saudi Arabia and other OPEC countries.
Petrone says impacts of that, if any, wouldn’t be felt in Alberta for a while.
“Our capital programs are usually set 12 to 18 months in advance. We’re watching it, and no doubt about it there will be some change in activity levels in the area, I don’t have any doubt about that, but I don’t think we’re going to see any significant changes this year.”
Petrone says there won’t be any changes to activity levels through the upcoming winter months.
“What will happen is most companies will re-invest cash flow that they generate in the year, in their capital program in the following year. So if the commodity prices drop by 25 per cent, that would mean about a 25 per cent cut in capital programs for the following year.”
In the meantime, local producers will be keeping a close eye on prices.
“I don’t think we’ll see any big jumps, unless something happens in the world that is unpredictable at this time, but all indications are that the price forecast is going somewhere around the $80-85, those are the numbers that I’m reading.”
Oil prices have dropped from $100 a barrel to $75 over about 6 weeks.