Oil price to stay below $50 US into 2017, Deloitte says

Deloitte says oversupply in the oil market will lead to a continued slump in 2016, with the price per barrel staying below $50 US into 2017, before starting a slow rise to $80 US a barrel by 2022.

The Edmonton Light price forecast anticipates an average 2016 price of $51 Cdn a barrel, keeping in mind a low exchange rate is propping up Canadian oil prices, the company said in a release Wednesday.

Demand for oil has increased this past year, most likely attributed to the drop in prices making consumption more affordable, but the trend is not expected to continue into the next year, it said.

"We've been talking about lower oil prices for the better part of the year, but with a warm winter looming, natural gas storage has reached a five-year high, which is going to further depress gas prices as well," said Andrew Botterill of Deloitte's Resource Evaluation & Advisory group.

On the upside, Deloitte says political moves to steer away from coal electricity generation in Alberta could have a positive impact for natural gas in the future once infrastructure is in place.

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