From $0 to $120 in 2 years — and the price of oil could climb higher

With so much pain at the gas pumps these days and the extraordinary price of oil around the globe, it's almost unfathomable to think a barrel of crude was worthless two years ago.

The price of oil even briefly turned negative in the spring of 2020 after the pandemic hit and travel activity by air, land and sea ground to a near halt.

Oil remains close to multi-year highs and any sign of weakness or a dip in value has been brief before a rebound in price. 

The oilpatch is now in a period of record revenue and awash in cash after a punishing string of years during the last decade — a period that included stubbornly low prices, widespread layoffs and costly pipeline bottlenecks.

"People that have survived and waited out the tougher times are getting rewarded now," said Travis Sperling, industrial sales and operations manager with Winters Instruments, which specializes in manufacturing pressure and temperature gauges.

Prices spiked after Russian President Vladimir Putin's invasion of Ukraine in February sent the market into turmoil. Initially, many expected the exorbitant prices wouldn't last, but sanctions on Russia and recovering economies are offering crude prices staying power.

"This is a long way from the downturn," said Hayden Binde, marketing associate with Montana-based BioSqueeze, which focuses on sealing leaks from oil and gas wells. 

Binde was one of hundreds of people in Calgary last week for the Global Energy Show, a conference and trade show. Morale is high, to say the least.

"A lot of businesses that I've talked to [are] busier. Things have been picking up, so companies are a lot more optimistic," said Rod Craven, a manager with Pumps and Pressure, based in Red Deer, Alta.

It's not just oil; natural gas prices too are at multi-year highs. The commodity prices provide an extra bounce in people's step at the convention.

Higher prices won't erase the scrutiny by governments over carbon emissions or climate change. And many at the conference are also keenly aware that energy prices are too high and causing affordability and inflation problems across the country.

Sherry Martin wasn't sure if her fuel bill for attending the event from Saskatchewan was worth it, but in the end she was happy with how many business leads she was able to pick up.

"If the fuel prices keep going up, it's going to hurt. It's going to really hurt," said Martin, part of the sales team at AGI Envirotank, which sells steel storage tanks.

After hovering around $120 US per barrel this week, there is plenty of speculation about where oil prices could go from here. Soaring to $150 or beyond isn't out of question.

"I sure hope oil doesn't get to $200," said Cenovus CEO Alex Pourbaix. 

"I'm a little bit worried that it's going to take a while for the industry to respond to this," and boost oil production, he said.

Oil prices are expected to decrease slightly but still end the year worth more than $100 US per barrel, said Liam O'Brien, a Calgary-based analyst with Sproule, an energy consultancy.

Gasoline and diesel prices could fall over the summer months if enough drivers are deterred by the cost of fuel to ditch their summer travel plans. For now, demand remains robust.

"There really isn't anything we can point to near-term that's going to cause an easing of prices. In fact, we could see prices lift, especially during the summer driving season," O'Brien said.

Like many other industries, the oilpatch is struggling to find enough workers, especially to go work in the oil and natural gas fields across the Prairies and into northeast British Columbia. Inflation and supply chain problems are also causing some rising costs and delays.

Still, the commodity boom far outweighs those challenges as the whole industry gets a financial lift.

"That's great for the economy, that's great for morale, that's great for the rest of us who are feeding into the oil and gas industry," said Adesua Eigbe, sales manager with Total Combustion Inc., which rents equipment to companies needing to dispose of waste gas.    

"That's job security, so I'm excited."