Analysts say there are still too many risks and uncertainties in the market to expect any new project spending in the energy sector, in a July 14, 2020 story. (Photo by THE CANADIAN PRESS)

Oilpatch optimism expected to rise as difficult second-quarter finally ends

Still too many uncertainties for new projects

CALGARY — Analysts say a rebound in oil prices as consumer demand for gasoline rises will buoy energy companies as they give quarterly results starting next week.

But they caution that there are still too many risks and uncertainties in the market to expect any new project spending as the second-quarter reporting season begins with results from Calgary-based Suncor Energy Inc.

The three months ended June 30 were marked by depressed oil prices blamed on a glut of oil from members of the OPEC-plus group, followed by a severe decline in fuel demand as pandemic lockdowns kicked in.

The price impact led to about $8.6 billion in announced capital budget cuts by producers of Canadian oil.

Analyst Michael Dunn of Stifel FirstEnergy says investors will be keenly interested in how companies are cutting costs and talking about plans for the rest of 2020 and 2021.

Phil Skolnick, an analyst for Eight Capital, says the second quarter will be the worst quarter this year for most energy companies and they will be reluctant to increase spending on new projects given recent setbacks in pipeline development and the risk of a second wave of the pandemic.

This report by The Canadian Press was first published July 14, 2020.

oil & gas

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Reeve: Development needs a reminder about public spaces

Ponoka County discusses promises of public access at Meridian Beach

Sylvan Lake welcomes three new family doctors

The three doctors are practicing at the Sylvan Family Health Centre and are accepting new patients

Rimbey RCMP respond to 44 calls for service last week

The files include three assault investigations and one assault with a weapon occurrence

Water quality advisory issued for Gull Lake at Aspen Beach

Elevated levels of fecal bacteria were detected via testing of Gull Lake water, at this beach location

NHL hit with criticism over English-only version of “O Canada” on Saturday

NHL hit with criticism over English-only version of “O Canada” on Saturday

Blackhawks’ Caggiula suspended for Game 2 vs. Oilers

Blackhawks’ Caggiula suspended for Game 2 vs. Oilers

Jets rebound with 3-2 win over Flames, even qualifying series 1-1

Jets rebound with 3-2 win over Flames, even qualifying series 1-1

Penguins beat Canadiens 3-1 in Game 2 to pull even in best-of-five series

Penguins beat Canadiens 3-1 in Game 2 to pull even in best-of-five series

Danielle Kang wins at Inverness in LPGA return to golf

Danielle Kang wins at Inverness in LPGA return to golf

Thomas holds off Koepka to win WGC in Memphis, reclaim No. 1

Thomas holds off Koepka to win WGC in Memphis, reclaim No. 1

Koepka’s biggest challenge is history in bid for 3 in a row

Koepka’s biggest challenge is history in bid for 3 in a row

Vegas, Dallas players kneel for anthems as protests gain momentum at NHL restart

Vegas, Dallas players kneel for anthems as protests gain momentum at NHL restart

Most Read