After several tough weeks, the Canadian oil sector is finally getting something to smile about.
Over the weekend, OPEC and allies agreed to reduce production by 9.7 million barrels per day.
This reduction will start on May 1 and will go into 2022.
Tim Pickering, CIO of Auspice Capital, tells Mix News this move won’t have a major impact in the short-term.
“There’s so much oil available near term that even with these cuts starting May 1 that’s not gonna solve the immediate oil prices – there’s just to much oil immediately.”
The price of oil has recently seen a slight increase. Heading into the summer, it could potentially see a bigger rise.
Unfortunately, Pickering says the sector will continue to struggle until the COVID-19 pandemic ends.
“We have to get used to that and I think this is going to be, hate to be the bearer of bad news, but a tough environment for a few years.”
Does this mean the sector has hit its peak? Pickering doesn’t believe so.
“The need and the importance of Alberta oil to supply the largest user of oil, which is the United States, long-term is relevant and that’s just not gonna go away.”