TORONTO, April 8 — Top executives at Canadian oil and gas companies say they are avoiding sudden decisions on production or spending, even as global oil prices fall to their lowest levels in four years and recession concerns grow.
Canada, the world’s fourth-largest oil exporter, was not impacted by the U.S. administration’s global tariffs announced on April 2. However, it still faces American duties on steel and automobiles, adding to the industry’s concerns.
Jon McKenzie, CEO of oil sands company Cenovus Energy, said most firms aim to keep investing through the downturn. “The industry is good at cutting costs during price drops,” McKenzie noted. “We’ll likely see some reductions in spending.”
Doug Bartole, CEO of InPlay Oil, echoed that view. He said his company doesn’t plan to cut production or capital spending for now. “Let’s not rush. We’ll wait and see how things settle,” Bartole said. But he admitted that if oil continues to slide, especially toward $50 a barrel, the company could reduce capital quickly. “We’re small and nimble. We can adjust fast.”
Oil prices have weakened since U.S. President Donald Trump announced new trade tariffs. On Tuesday, Brent and West Texas Intermediate (WTI) crude dropped to about $60 per barrel amid fears of a global economic slowdown.
ATB Capital Markets lowered its price target for InPlay Oil shares due to current WTI pricing and warned that prolonged lower prices may force companies to cut spending and slow output growth. Still, it expects Canadian oil production to rise this year.
Mike Rose, CEO of Tourmaline Oil, said lower oil prices tied to a possible recession could affect their capital plans. “If prices stay low, that could change how much we spend,” he said.
Economist Peter Tertzakian from think tank Studio.Energy said larger oil sands producers can survive low prices, but smaller firms may need to revise budgets if prices remain weak. “At $61 or $62 per barrel, we likely won’t see much growth,” he explained.
Eric Nuttall, a senior portfolio manager at Ninepoint Partners, doesn’t expect a major decline in Canadian output. However, he does foresee possible job cuts, especially in the drilling sector and among smaller firms. “Companies will act quickly where there are costs to cut,” he said.
Chris Carlsen, CEO of Birchcliff Energy, a natural gas producer, pointed out one potential benefit of falling oil prices. If oil drilling slows, less associated gas will be produced, which could support natural gas markets. “We might see a gas shortage if overall drilling drops,” he said.
While the industry remains cautious, many executives agree that flexibility and cost control will be key if oil prices stay low and economic pressure continues to build.
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