One expert says the industry’s ‘temporary slowdown’ will be reflected in the upcoming first quarter numbers.
Dr. Frank Atkins is an Associate Economics Professor at the University of Calgary.
He says the price differential between bitumen and West Texas crude is narrowing but it’s not predictable, and there will always be some discount.
He says it won’t be predictable until new pipelines are built.
“We can produce oil but until we can get it somewhere through pipelines there’s going to be a surplus of bitumen here in Alberta,” says Atkins, “and that differential will be around, it’ll be annoying, and it will affect the bottom line.”
We’re going at pipelines a little too late, and there are still lags in the system says Atkins.
“If the Keystone X.L. got approved tomorrow, oil isn’t going to free instantly all the way to Texas, it’s going to take some time to get certain parts of it built so its going to take a year or so to get rid of the bottleneck.”
He says once the bottle neck is gone, the market should straighten itself out.
April 24th, 2013
