Canadian executives predict $31 oil, robust stock markets

Gary Park

Petroleum News Calgary correspondent

Canadian oil patch leaders are upbeat about the next three years.

They are counting on average oil prices of US$31 a barrel this year and US$28 over the next two, while predicting natural gas prices of C$5-$6 per gigajoule over the same three years.

They made their forecasts in the 12th annual survey of chief executive and chief financial officers by accounting firm Deloitte & Touche. The results were released May 17.

Richard Cooper, leader of the Canadian Energy Resources group in the firm, said the industry, although “often conservative” in its projections, has a solid record of assessing directional changes.

The executives are bullish on the stock market outlook, with almost 60 percent expecting the Toronto Stock Exchange’s main energy index will rise 15 to 20 percent this year. Most expect further gains in 2005 and 2006 as well.

The market gains will also be accompanied by further consolidation, with an “overwhelming majority” of the respondents certain that the action will be concentrated in the income trust sector through trust mergers or independent producers converting to trusts.

More than 70 percent of those surveyed believe employment in the industry will rise this year, but 40 percent said they are having increasing difficulty finding engineers, geologists and other professionals to fill positions.

Despite those shortages, about 70 percent said they do not expect salaries to rise significantly, Cooper said.