Deloitte: Crude Prices to Increase in Canada for 2024

Deloitte, a worldwide consulting firm, forecasts that Canadian oil producers will benefit from increased crude prices in 2024 as the TMX pipeline begins transporting approximately 590,000 bbl/d for export.

The majority of these extra shipments will be expected to go to international markets rather than the United States, reducing Canadian producers’ reliance on U.S. refineries and helping to close the WCS price gap.

“The extra capacity created by the TMX pipeline is expected to boost Canadian production by about 375,000 barrels a day over the next two years,” says Andrew Botterill from Deloitte Canada. “That’s more than the total amount added over the last five years.”

Botterill also noted that “the extra supply of North American crude will likely continue to be offset by voluntary supply cuts from some OPEC+ member countries, moderating any downward pressure on prices.”

“We saw the same thing happen this summer when oil prices surged even as U.S. production volumes recovered to near pre-pandemic levels and exports rose from Iran and Venezuela.”

The Canadian heavy crude sector has been affected for years by shortages of pipelines and ongoing environmental concerns, prompting some companies to leave in response to pressure to invest in lower-emissions projects. Premier Danielle Smith has recently stated that Alberta, a province rich in energy resources, will move away from emissions rather than oil, but this is not likely to happen anytime soon.

“We’re transitioning away from emissions, we’re not transitioning away from oil and gas. We’re not going to phase out production of oil and natural gas, we’re just going to change the way in which we use it,” said Premier Smith at the World Petroleum Congress in Calgary, Alberta. 

Smith has called the International Energy Agency’s prediction that global oil demand will drop to just 25 million barrels per day by 2050, or a quarter of current global demand, “ludicrous.” This prediction had been backed the day before by Canada’s Minister of Energy and Natural Resources, Jonathan Wilkinson.