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CAPP’s new forecast reverses predictions made last year, before crude oil prices started to fall from over US$100 per barrel, when the industry association expected light oil production to continue growing as a result of the widespread use of hydraulic fracturing techniques.

The West Texas Intermediate benchmark price for oil has fallen over 50 per cent since that forecast was released, although it has since rebounded and WTI closed Tuesday at US$60.14 per barrel.

Last Friday, OPEC member countries led by Saudi Arabia reaffirmed the group’s intention to pump 30 million bpd into the energy market – a move that North American analysts have said is partly intended to force shale and light, tight oil production out of the market.

“I think near term, Saudi Arabia, the UAE and Kuwait, who are the main players behind the new OPEC strategy, they are being successful certainly in triggering a huge drop in [North American] capital spending on exploration and development,” Scotiabank vice-president and commodity markets specialist Patricia Mohr said in an interview.

TD Bank economist Dina Ignjatovic said that the multi-year decline in light oil production “is probably the lagged effect of the lack of investment now” and the fact that oil wells produce at a declining rate over time.

CAPP also trimmed its overall growth expectations for Canadian oil production by 1.1 million barrels per day. It now expects Canadian production will rise from today’s 3.7 million bpd to 5.3 million bpd in 2030 entirely as a result of the continued growth of the oilsands.