Newspaper article The Canadian Press

Rough Ride: A Look at Canada's Oil Sector before and after the Collapse

Newspaper article The Canadian Press

Rough Ride: A Look at Canada's Oil Sector before and after the Collapse

Article excerpt

A look at the oil sector's rough ride

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CALGARY - It's been a rough ride for Canada's oil sector since the middle of last year.

In June 2014, the U.S. benchmark crude price averaged US$105.79 a barrel. By January of this year, it had shrivelled to just US$47.22 -- a drop of about 55 per cent.

West Texas Intermediate crude has since been climbing closer to US$60, but executives in the oilpatch aren't holding out hope for sustained recovery just yet.

Crude prices fell steadily throughout the second half of 2014 amid burgeoning North American production and tepid global demand. But the trajectory got much steeper in late November, when the Organization of Petroleum Exporting Countries opted to keep up its output quotas, rather than cut them in order to put a floor under prices. The move was interpreted as a way to put more costly competitors, like U.S. shale oil producers, out of business.

Here is a look at the how the picture has changed for Canada before and after the oil collapse:

Jobs:

The downturn has led to thousands of job losses in the oil and gas sector and the industries that support it.

The petroleum labour market information division of Enform says the Canadian economy could lose as many as 185,000 direct and indirect jobs related to the oil and gas industry -- a 25 per cent decline from last year.

Alberta is expected to bear the brunt, but the group says the pain would be felt across the country, with 20,000 job losses estimated in British Columbia and 14,000 in Ontario.

With new projects being shelved amid the uncertainty, engineering firms are expected to absorb the biggest hit, with 75,000 potential job losses.

The oilfield services sector has also been hit particularly hard. The Canadian Association of Oilwell Drilling Contractors says each active drilling rig represents 135 direct and indirect jobs, many of which are in rural communities.

-- Precision Drilling, one of Canada's biggest oilfield services firms, has said it has cut 2,500 positions in the field since November. …

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