Oil prices soar – Swiss

The price of a barrel of oil underwent a dazzling rise Wednesday at the announcement of a 90-day break on the punitive customs duties that the United States had imposed on many countries.

The reference price of North American oil, the West Texas Intermediateclimbed a hollow of around US $ 55 to US $ 62 in the space of a few hours.

It is an incredible turnaround. We had not seen such a situation since the years of pandemica dit Martin Kingthe director of analysis of the North American energy market at RBN Energy.

The oil price remains of several dollars lower than its level of a week ago when the announcement of punitive rights began to tumble stock markets.

Martin King expects the return to normal to take several weeks, especially since the ping-pong of prices and continuous reprisals between the United States and China. This country is The biggest importer of crude oil in the world, with around 11 million barrels per day imported in 2024.

[La Chine] influences the market not only by its activity on the markets, but also of the effect of perception of health of its economyhe explains.

Relatively protected Canadian industry

Even if the last days have certainly awake Canadian producers, the boost did not last long enough to transform industry activities, according to Martin King.

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It is an industry that has made low debt and a [bonne] capital structure a religion. It has been a while since she made sure to have a competitive cost structure worldwidesaid on Tuesday the leader of the oil Cenovus Energy, Jon mckenzieduring a symposium organized by the BMO bank and the Canadian Association of Oil producers (ACPP).

Companies have been built to be resistant at much lower prices.

Our action is down, and this displeases our shareholdershad also said Mike Rosethe CEO From the Tourmaline company, while prices were at their lowest in a week. The company’s action lost more than 17 % in five days before resuming 5 % on Wednesday.

Of course, we are worried. However, we do not know if this is a short, medium or long -term problem, and that is what will determine our response.

Martin King adds that the operating companies of bituminous sands are particularly resistant to market fluctuations because, after the initial investment, operating costs are very low. A lesson at US $ 55 would only harm the increase in production projects in a marginal manner.

In Canada, companies are rather optimistic.

In Canada, efficiency and geology are better. There are more production possibilities for businesses, even at US $ 50 per barreladds Tristan Goodman, president ofExplorers and producers association of Canada, which represents small producers.

He adds that, on the contrary, American oils, especially in the Permian basin, need a barrel at US $ 65 to benefit from their activities.

A search report for the Enverus firm published on Tuesday indicates that the expansion of existing projects is viable with low oil prices, but that new projects would require stable prices of $ 80 US or more to be approved.

Martin King Adds that the price difference between Canadian oil and American oil has also tightened, which better protects Canadian markets from market fluctuations than in the past. The small Canadian dollar also has a beneficial effect on this side of the border, according to Tristan Goodman.

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At the start of the week, the Prime Minister of Alberta Danielle Smith also put into perspective the effects of current volatility. The province planned its budget on a price of WTI At 68 US dollars and each drop of $ 1 compared to this forecast corresponds to a loss of income of $ 750 million for Alberta.

I do not panic after only seven days of data. We had a lot of variations last year and had planned volatility in our worst budgetary scenarioshe said on Monday.

With Reuters information