CALGARY, A.B. — According to an article in the Financial Post, the Canadian oil and gas sector could be showing optimism this week as various oilpatch companies begin releasing their quarterly earnings.
Oil prices have risen gradually since the early summer as markets show signs of returning to balance, leaving analysts to possibly expect the first signs of positive news for producers.
Calgary-based Altacorp Capital analyst Nicholas Lupick says that he thinks the outlook has started to improve.
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Oil prices that have settled in the $40 to $50 per barrel range since June are expected to show in companies’ third quarter results. Prices for international benchmark West Texas Intermediate opened Monday morning trading at $50.85, while Brent Crude opened at $51.78.
However, Lupick and others also warn that signs of health in the market are only early indications, and any recent gains in the balance sheet could be easily wiped out if prices reverse course. The first half of 2016 was particularly painful for the Canadian oilpatch. Prices collapsed in February on fears of oversupply, bringing prices down to multi-year lows. Prices for the month of Western Canada Select, the Canadian heavy oil benchmark, averaged US$16.30 per barrel.
Then in May, wildfires tore through the town of Fort McMurray in the heart of Alberta’s oilsands country, forcing companies to shut in about one million barrels per day of production.
Production has since returned to its former levels, which will account for a much-needed revenue bump for some companies in their third quarter results. Suncor Energy is the first to report, with results out tomorrow, followed by Cenovus Energy on Thursday, Imperial Oil on Friday, and CNRL on Nov. 3.
Analysts following oilsands giants Suncor and Imperial Oil expect the companies to have improved results after they were forced to shut down production during the wildfires.