As the availability of COVID-19 vaccines continues to grow, industry leaders say it could turn things around for the oil and gas sector.
The latest forecast report from Deloitte says there will be a return to "higher demand" for crude after the challenges of 2020.
"Although crude oil markets are likely to remain relatively flat in the near term, we started seeing prices increase somewhat toward the end of 2020 and expect that to continue as economies begin to reopen and recover from the effects of the pandemic," said Andrew Botterill, national oil and gas leader for Deloitte Canada, in a release.
However, the differential between West Texas Intermediate (WTI) and Western Canadian Select (WCS) is expected to widen over the next five years as the additional costs of shipping oil by rail are factored in.
The price of natural gas, which was up by 25 per cent year-over-year, resulted in Canadian natural gas storage levels above the five-year average because of increased drilling.
Deloitte says the supplies will decrease over the first quarter of 2021 because of the winter months.
Oil and gas companies, if they want to stay competitive, must work to understand how markets are changing because of the pandemic, Botterill says.
"Energy transition is going to take years if not decades to complete but planning and investments by producers have to be happening now," says Botterill.
"We believe oil and gas producers should be engaging with their stakeholders to help them make the right choices to stay successful and to build trust with their investors, with regulators and with the public."
According to online data, WCS is currently $34.88 USD per barrel while WTI is $50.48 USD.