The price of Western Canadian Select heavy oil plummeted to $4.58 USD per barrel on Friday morning.
The ongoing oil price war between Russia and Saudi Arabia, combined with the global coronavirus pandemic is causing the already struggling industry to crash.
Prices fell by 30.5% yesterday, bringing prices down to $6.45 USD per barrel at the end of the day.
The low prices have forced some producers to hold onto their product instead of transporting it to potential customers.
“Prices are so low that there’s no point in transporting if you don’t have to. If you can move it into storage, you will,” RS Energy Group senior associate Stephanie Kainz told the Financial Post.
According to oil and gas analyst Matt Purhy, the low price could lead to a halt in approximately 20% of Canada’s bitumen production.
Alberta Premier Jason Kenney recently announced new stimulus measures to help the oil and gas industry weather the storm.
“This will be, I believe, the most challenging time in our economy for several decades,” said Kenney on March 20th.
“I think the government of Canada understands that we cannot afford to lose the single largest subsector of the Canadian economy, the largest export industry.”
Part of the plan includes waiving $113 million worth of Alberta Energy Regulator fees and providing a one-year extension to oil and gas tenures. Kenney also established an economic advisory panel to plan the province’s future economic recovery.