Senior Vice President
Wells Fargo Equipment Finance Canada
Since OPEC and non-OPEC countries announced their intention to freeze or reduce production, we've seen a rise in oil prices. Having a WTI oil price above $50 should boost capital spending and provide more work for the battered service industry, while leading the energy industry in Western Canada on a path of economic recovery unseen in recent years.
As stated above, several key indicators support a favorable outlook for 2017. First, the gap between supply and demand is shortening, resulting in declining inventory builds. In 2017, the International Energy Agency (IEA) forecasts global oil inventory to average 0.4 million b/d vs. 0.7 million b/d in 2016, a drop of 0.3 million b/d. IEA is also expecting global oil demand to grow 1.4 mb b/d in 2017 vs. a decrease of 0.1 million b/d in production. Further, Natural Gas Henry Hub prices have risen nearly 40% since mid-November, reaching the highest price since December 2014.
Recent positive federal government announcements about approving budget to build more pipelines in Western Canada should also provide future economic potential for energy-construction-oriented companies in Western Canada.
The positive trends could lead energy producers to increase their equipment acquisition and capital spending in 2017. However, considering how severely damaged balance sheets have been in the last 2 years, as well as the large numbers of underutilized equipment in most large fleets, this would likely mean a slow economic recovery in 2017 with modest equipment purchases.
Only companies that have been able to improve productivity and effectively "ride the wave" over the last 2 years will be well-positioned to seize the upcoming potential economic opportunities.
Having a deep knowledge of the industry and the issues currently facing Western Canadian businesses, our team is well-versed in structuring multiple leasing and financing options that fit our customers' needs. Wells Fargo Equipment Finance is one of the largest equipment finance lenders in North America and we are well-positioned to assist Western Canadian companies with numerous financial products. With Wells Fargo Equipment Finance's pre-approved line of credit, our customers can quickly and efficiently take advantage of new technology purchasing opportunities to improve productivity in this ever-changing business environment.
As SVP Sales, Russell has led an asset-based lending team in Western Canada with GE Capital, and now Wells Fargo, for more than 16 years, and has been successful in driving YoY growth in new business volume and profitability within the region. His practical approach and smart business philosophy give him the ability to lead business growth by simultaneously focusing on his customers and his team.