3.6 Supply & Demand in Alberta
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As of 2017, Alberta has been slow to recover from the 2008 recession. Part of the problem has been the significant drop in the price of crude oil that began in 2014. Two of the reasons for the drop in price are oversupply and declining demand of crude oil.
Certain nations have attempted to corner the global crude oil market by dumping. Global oil inventories (stockpiles) continue to rise. And while the supply continues to increase, the demand for crude oil is weakening. Cars are becoming more fuel-efficient. Countries are importing less crude than in previous years.
The only way to remain competitive when prices are low is to reduce production costs by either increasing efficiency or reducing employees. In Alberta this resulted in massive job losses (at Cenovus Energy and Schlumberger Canada, for example).
Certain nations have attempted to corner the global crude oil market by dumping. Global oil inventories (stockpiles) continue to rise. And while the supply continues to increase, the demand for crude oil is weakening. Cars are becoming more fuel-efficient. Countries are importing less crude than in previous years.
The only way to remain competitive when prices are low is to reduce production costs by either increasing efficiency or reducing employees. In Alberta this resulted in massive job losses (at Cenovus Energy and Schlumberger Canada, for example).