As Canadian oil companies prepare to start reporting what is sure to be a dismal Q1 income and short-term outlook, analysts expect that companies will announce production cuts of around 1 million barrels per day in the coming months given the loss of demand and low oil prices.
“It is difficult for us to understand how West Canada’s crude oil production can avoid a decline of ~ 1 million + bbl / d output in the coming weeks,” Michael Dunn, an analyst at Stifel FirstEnergy, said in a note, as carried out by Bloomberg.
Companies in Canada have done it react to falling oil prices, but analysts and investors will look for further clues in the earnings report on how they plan to get through the second major oil crisis in just five years.
Husky Energy has cut its budget and production, Cenovus Energy slashed Capital expenditure in 2020 is around 32 percent, Suncor guidelines for cutting capital, and so do Canadian Natural Resources. Athabasca Oil Corporation also cut the capex and proactively reduce heavy oil production at Hangingstone.
“I hope to see injuries everywhere … This is a survival game now,” Athabasca Oil CEO Rob Broen said Calgary Herald columnist Chris Varcoe last month.
“Being a price taker has made us very vulnerable to dramatic changes in oil prices and what we see today will have a direct negative impact on the Canadian economy,” Tim McMillan, President and CEO at the Canadian Oil Producers Association (CAPP), the word in early March when international oil prices plummeted 25 percent.
According to Rystad Energy estimate“Canada’s restrictions are running smoothly, and the building storage crisis will continue to test operations as we approach May when global storage is likely to reach full functional capacity. Unless more significant upstream volumes are cut globally, Canada’s restrictions may eventually exceed 1.3 million barrels per day in the second quarter, “said Rystad Energy senior analyst Thomas Liles earlier this week.
By Tsvetana Paraskova for Oilprice.com
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