Oil prices are expected to hover around $50 US a barrel for the rest of the year.
That’s according to Andrew Botterill, Partner with Deloitte’s Resource Evaluation and Advisory group, who released their third quarter price forecast on Wednesday.
He tells Mix News there’s a little more “optimism” in the sector as the prices continue to slowly rise.
“The optimism is really around how stable the prices have been in the last six months or so which is allowing companies to really get much more comfortable selling capital.”
Botterill adds this stability is giving many companies a sense of “confidence” in deploying their own capital to expand their operations.
“I think that is starting to create a little bit of energy in the sector.”
Starting next year, Deloitte is forecasting the prices to rise to $52 US a barrel.
Meanwhile, natural gas is continuing to see depressed prices with increased volatility.
Botterill says a lack of market choice is creating a higher-than-usual differential between the prices for U.S. and Canadian natural gas.
“The United States are producing a lot of gas themselves, they have great resources and demand is just not at the point where they’re needing as much Canadian volumes as they’ve had in the past.”
He notes many Canadian projects have stalled resulting in the prices lagging behind those in the U.S.
Right now, AECO (Canadian) prices are expected around $2.00/Mcf while Henry Hub (American) will be around $3.10/Mcf for the rest of the year.