Oil Price Spurring Economic Activity

A year ago, the price of a barrel of Western Select crude oil was $3. Today is north of $50.

This is the oil market these days – volatile.

And the price strength has prompted producers to get back into the game in this part of the world. Production in Western Canada has been rising for several months as attractive prices bring wells that had been turn off back into production. Add to that the winter storm in Texas that hampered production and oil supplies in North America are declining. Consumption is returning – especially in the US where a million and a half people are receiving vaccinations daily – as demand for motor fuel, including aviation gas, is rising.

In Canada, which ships oil south, that is making prices more attractive, triggering production increases which is filling pipelines and pushing oil into railcars for shipment to the States.

In its latest commodity report, ScotiaBank says this is more than a blip – these prices are well supported as the world is showing signs of recovery from disruptions caused by the pandemic.