It’s the first bit of good news in a while for the oil industry.
Over the last few days there has been something of a truce in the oil price war between Saudi Arabia and Russia.
When the COVID-19 pandemic broke out and people stayed home rather than commuting to work, demand for oil started to fall. The resulting price decline sparked a cut throat battle between Saudi-led OPEC and Russia. Both sides wanted to claim more market share as other producers pulled out in the face of prices as low as a few dollars a barrel for some types of production.
But now we have something of a truce between the two sides. They agreed to curtail production by 10 million barrels a day – that’s about 10-percent of the world’s output – for the next few months. The deal has given oil prices a little stability and, for a producing province like Saskatchewan, that is a positive development.
Whether this agreement has staying power remains to be seen but it is a first step in breathing some life into this province’s industry.