CALGARY, Alberta (Reuters) - Canada’s National Energy Board downgraded its long-term crude oil supply forecast on Wednesday, saying the country would produce around 400,000 barrels per day less oil in 2040 than previously estimated.
The NEB said it now expects Canada, which holds the world’s third-largest crude reserves after Saudi Arabia and Venezuela, to produce 5.7 million bpd by 2040, a 41 percent increase on 2015 levels.
That estimate is lower than the forecast of 6.1 million bpd by 2040 that was released in January this year, and the NEB attributed the cut to lower oil price assumptions.
The price of Brent crude oil LCOc1 will rise from $45 a barrel in 2016 to $68 a barrel in 2020, and $90 a barrel by 2040, according to the regulator’s estimates. The latest 2040 price forecast is $17 lower than the one made in January.
On Wednesday Brent crude was trading at $49.88 a barrel, the result of a nearly two-and-a-half year slump in global oil prices triggered by oversupply.
“The oil price is a key uncertainty for future growth,” NEB chairman Peter Watson said in the report.
The Canadian Association of Petroleum Producers, a Calgary-based industry body, also downgraded its production outlook earlier this year, forecasting that Canada would produce 4.9 million bpd by 2030, compared with its previous estimate of 5.3 million bpd.
In a statement the NEB said since its January report numerous new climate policies had been announced by the federal and provincial governments, including the phase out of coal in Alberta and Ontario’s economy-wide carbon cap and trade program.
Energy use, including energy derived for fossil fuels, is expected to increase over the next 24 years, albeit at a slower pace than estimated earlier this year, while the electricity sector will add new wind, solar, hydro and natural-gas fired generation to replace coal.
Reporting by Nia Williams; editing by Diane Craft