By Kevin Quick- Key Account Manager Oil & Gas,Transcourt Tank Leasing
Each year, the Oxford Dictionary chooses a Word of the Year. For 2018 it was “toxic” (hopefully not an indication of things to come).
In the Canadian Oil industry, the word of the last two years has been “Cautious Optimism”. There has been a roller coaster ride for crude oil trucking during this period – and like any theme park, some have chosen to get off, while others feel they have paid for their ticket and are riding it out, even if they don’t enjoy it.
Thousands of loads of crude oil move by truck every day in Canada, employing thousands of people in many aspects of the industry.
Unfortunately, in today’s world, there are many factors which affect the pricing and profitability of crude oil beyond the control of Canadian producers and carriers of the product.
Some current factors and facts:
- In February of 2017, there were 352 active drilling rigs in Western Canada. In February of 2019 there were 243. A 31% decrease. During the same period, pricing for Western Canadian Select has increased by 15.8%.
- Since the implementation of the production cap in Alberta, there has been a significant reduction in the discount between WCS and WTI pricing. Currently, it has varied between $10 and $12 BBL.
- Depending on the jurisdiction, both Federal and Provincial Carbon Taxes have had a varied impact on crude oil production.
- Recent Provincial Government elections in Canada have created an adversarial environment between provinces regarding pipeline development and expansion. This has had a significant impact on investment in crude oil production and does not appear to be approaching resolution in the near future.
- Recent political instability in Venezuela has prompted sanctions which have had a positive affect on Crude Oil pricing.
All things considered, there appears to be ongoing uncertainty in the crude oil industry for the foreseeable future.
Companies like Transcourt Tank Leasing can offer solutions for medium and long-term trailer leasing which can remove the uncertainty of making a significant trailer investment during these times. Trailers are available in a variety of configurations to fit your needs for both crude oil and related product hauling. Customers can opt for either Operating Leases or Lease to own.