Oil price to limit output rise in the Americas

CALGARY, Alberta (Reuters) – Oil production in the Americas is expected to climb only slightly this year with previous outlooks for Canada and Brazil looking too rosy after a collapse in crude prices turned an industry boom to bust.

Production in the Americas looks set to rise in 2009 by a net 100,000 barrels a day, or 0.5 percent, to 20.98 million barrels a day — about a quarter of total estimated world output — according to Reuters calculations based on a survey

Any gains will be from big-ticket projects where companies invested most of the capital before oil prices tumbled to under $40 a barrel from highs above $147 in the second half of last year, such as a few Canadian oil sands developments.

Only last year, pricey unconventional resources and Brazil’s massive offshore oil finds were trumpeted as bright spots for crude output growth in the hemisphere.

But costs of materials and labor went through the roof, then oil prices and credit markets fell through the floor, making those reserves even harder to access.

That, along with steep production declines in Venezuela and Mexico, has prompted a stark conservatism in forecasting.

Reuters