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The recent recovery and stabilization of oil prices has led to increased business confidence for Canada’s oil and gas companies, which expect improved business conditions and project slightly higher salaries this year, The Conference Board of Canada said on Thursday.
“Canadian organizations’ projected salary increases have generally remained unchanged since the summer except for apparent shifts at industry and regional levels. In particular, we are seeing energy sector organizations responding to the steadied price of oil with greater confidence in business conditions and a slightly better compensation outlook,” Allison Cowan, Director, Total Rewards, The Conference Board of Canada, said, commenting on the board’s most recent survey.
According to the survey among around 200 companies, 77 percent of oil and gas companies expect business conditions to improve this year, compared to just 9 percent of oil businesses that were optimistic for last year.
The optimism in the oil and gas industry is much higher than that of companies of all industries across Canada—24 percent of all surveyed firms think the business climate will improve this year.
Projected salary increases among the oil and gas businesses have risen to 1.4 percent now from 1.1 percent in the summer of 2016. But as a whole for Canadian companies, salary increase expectations have been depressed since the summer as a sluggish labor market overall is putting downward pressure on salaries, the board said.
Last year, the Canadian oil industry was long suffering from the lower-for-longer prices, but since oil prices have held above US$50 per barrel for a couple of months now, it looks like the worst may be over.
At US$50 a barrel, it seems that a lot of Canada’s troubled oil businesses came back to life. There is intensive rehiring in oil sands drilling, and producers are announcing expansion plans.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.