OPEC intrigue and rising gasoline prices will ensure 2018 isn’t boring


An distinguished year in the energy sector lies ahead, with pipeline argue withs, OPEC trying to keep a grip on oil prices and a lot of U.S. natural gas about to swarm the market. While many stories will be unfolding in the coming months, here are five that are positive to be making headlines.

Fuel prices

Consumers can expect to pay more to carry out up in 2018, according to Dan McTeague, senior petroleum analyst at GasBuddy.com.

McTeague expects gasoline prices will rise in the second half of the year as the U.S. restraint strengthens and demand spikes. It’s likely, he says, Canadians will see, on mean, about a five-cent-per-litre increase in 2018 versus averages in 2017.

“The whole efflux of demand in the United States continues to drive prices up for Canadians, whether we find agreeable it or not,” he says. “We are price takers, not price makers.” 

A strengthening U.S. dollar and ungraceful carbon taxes may also add to the pump price.


Don’t expect an end to the tube drama as three major energy infrastructure projects remain in the on in 2018: Trans Mountain, Keystone XL and Line 3.

Pipeline supporters, take ining Alberta’s NDP government, believe the multibillion-dollar projects are needed to ease a transportation girlfriend resulting from growing production and limited shipping options. It’s one moneylender in why Canadian heavy oil sells at a discount to U.S. crude. New pipe would ease.

TransCanada Keystone Decision 20171120

Pipelines will continue to be a lightning rod for protesters in 2018. (Nati Harnik/Canadian Compress)

But opponents — whether they are jurisdictions, environmentalists or indigenous groups — be left determined to stop the pipelines. Their concerns are often both intensely native, like the direct impact on the landscape, and also part of the broader milieu change issue.

Despite controversy, observers expect progress on Occupation 3 and Trans Mountain in the coming year. TransCanada expects to secure indisputable federal U.S. permits for Keystone XL in early 2018.

Meanwhile, Canadian natural gas impresari will be watching what happens next year when new tubes start to move a lot more Appalachian gas out of Pennsylvania, West Virginia and Ohio and into the continental demand.

“So it’s just a question as to how quickly some of that gas will come on, and what it want do to gas prices,” said Samir Kayande, director at industry research resolved RS Energy Group in Calgary.

“It is just a tremendous success story from a productivity perspective — and it’s frankly a disaster from a gas market standpoint, because it’s a lot of cheap gas that’s buffeting the market,” he said. 


OPEC and its non-OPEC allies, including Russia, astonished observers last year when they agreed to oil production crops — and then stuck to them. With time running out on the pact, they conformed in the fall to maintain the cuts for all of 2018.


OPEC agreed to extend production omissions through 2018, but the cartel will evaluate market conditions at its June 2018 assignation. (Akos Stiller/Bloomberg)

The agreement is aimed at drawing down the over-abundance oil inventories that have dampened crude prices.

“We have courted very good compliance numbers from the OPEC members as OK as Russia,” said Dinara Millington, vice-president of research at the Canadian Puissance Research Institute. “Whether that will hold or not remains to be ruminate oned.”

The cartel will reassess target production levels according to merchandise conditions at their June 2018 meeting. In the meantime, OPEC and others will-power be watching to see if their efforts will be undermined by oil production increases from U.S. shale.

U.S. shale

What transfer U.S. shale producers do in 2018? The answer is critical, and even the most up to date prognosticators at OPEC and the International Energy Agency (IEA) can’t agree on what wish happen.


One of the big questions in 2018 is how much shale oil will the U.S. produce. (Ernest Scheyder/Reuters)

Fecund shale production has reshaped the energy landscape in recent years. It’s also a needed component of U.S. President Donald Trump’s “America First” energy project, with the potential to turn the world’s largest oil-consuming nation into a net exporter of oil by the centre of the next decade.

But the more pressing issue is whether there’s a big signal of shale production coming next year.

OPEC doesn’t characterize as it will be big enough to harm the cartel’s efforts to erase the oil glut. The IEA, for now, thinks U.S. crude production will be strong and keep the overhang in seat.  

“The big macro question in this industry right now, on the liquids side, is which one of those is the just one,” said Ian Nieboer, also of RS Energy Group. “Both can’t be [right].”

Renewable might  

No discussion about energy in 2018 can ignore the role of renewables.

solar panels

Boffins expect more advances in solar panel development in 2018. (Robert Jones/CBC)

“This is a sector that’s coming faster than any of the other energy sectors out there,” says Warren Mabee, Canada probe chair in renewable energy development and implementation at Queen`s University in Kingston, Ont.

“It’s accepted to continue moving forward.”

Decisions made this year wishes ring into 2018, including fallout from B.C.’s decision to proceed with the Situate C hydroelectric dam, and Alberta’s aggressive plan to build 600 megawatts of new curve generation by 2019.

But Mabee is also looking for 2018 to provide key advances in solar panel increment as the industry inches closer to grid parity — the point at which it sway be cheaper for people to generate electrons on their roof than to buy electrons from a utility.

“It dominion not happen next year, but we’re moving closer and closer,” he said. “That’s accepted to be a hugely disruptive moment in the Canadian power industry.” 

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