Interest in Canada drilling sites drops as trade war and low oil prices hit

Canada's oil drilling boom is slowing down. Companies are paying much less money to buy land for drilling oil in Alberta, Canada's main oil region.

This year, companies paid an average of $771 Canadian dollars per hectare for oil sands land. That's 18% less than last year, which had the highest prices since 2007. For other oil lands, prices dropped 25%.

The main reasons for falling prices are President Trump's trade wars and OPEC+ countries producing more oil. These have caused oil prices to drop to four-year lows.

Last year was different. Canada completed the Trans Mountain pipeline, which can move 600,000 more barrels of oil per day. This made companies excited to drill more oil and buy more land, pushing prices very high.

Even though land prices are falling now, Canada's oil companies plan to keep producing more oil. Oil sands production should grow to 3.8 million barrels per day by 2030.

One hot area for drilling is called Elmworth, near Grande Prairie. Companies paid $1,734 per hectare there last year - the highest since 2003. This area produces light oil that helps heavy oil flow through pipelines.

The situation in Canada is similar to the United States, where oil companies are also slowing down their drilling plans.