CALGARY - Drilling activity in the Canadian oilpatch will return to pre-pandemic levels in 2022, according to a new industry forecast.

The Petroleum Services Association of Canada (PSAC) says it expects a total of 5,400 wells to be drilled in Canada next year, an increase of 16 per cent year-over-year and the most activity since 2019.

PSAC also revised its 2021 forecast to 4,650 wells, in light of increased activity in the last half of the year. At the start of 2021, PSAC was predicting 3,350 wells to be drilled for the year.

PSAC's forecast for 2022 is based on a projected WTI crude price at an average of $70 per barrel, and an AECO natural gas average of $4.10 per thousand cubic feet.

PSAC president and chief executive Gurpreet Lail says while the outlook for the oilpatch is brighter than it was a year ago, the industry has not yet rebounded to where it was before oil prices crashed in late 2014.

She says while higher commodity prices are driving an uptick in drilling, the industry is also facing a severe labour shortage that could impede growth.