Oil prices, not government, driving up production

Oil production in Alberta has hit a record high and you can thank rising prices.

That’s according to a new article from Maclean’s magazine, authored by University of Calgary assistant professor of economics Trevor Tombe.

He said daily production reached an all-time high in November.

“In that month, we produced a little over 3.3 million barrels of oil per day,” he said. “That also comes off of some pretty substantial lows, when a lot of oil and gas facilities shut down due to the Fort Mac fire.”

He said 2017 is starting off strong and drilling is picking up substantially.

Total rigs in use is now above 50 per cent, which is a big improvement over the same time last year and nearing early-2015 levels.

“The government points to changes in policy as the reason why drilling activity is up, and prior to this new data, the opposition would consistently point to government policy as the reason why oil and gas activity is down,” Tombe said. “But I think what matters at the end of the day is the price.”

Most analysts are forecasting it will hover between $50 and $60 a barrel most of the year.

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