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Drill pipes are stacked on a trailer at a Baytex Energy Ltd. in the Pembina oil field near Pigeon Lake, Alberta, Canada.Norm Betts/Bloomberg

A drilling industry group says the oil patch is in for another year of weak activity as low commodity prices continue to pinch.

The Petroleum Services Association of Canada (PSAC) expects 5,150 wells to be drilled in 2016, down from an estimated 5,340 this year. It's an even more dramatic drop from the five-year average of 11,670 the industry saw before crude prices started to nosedive and then languish below $50 (U.S.) a barrel .

PSAC CEO Mark Salkeld says the sector hasn't been able to make anything better out of a bad situation because of pipeline constraints and policy uncertainty.

"Low commodity prices, oversupply and low cash flows obviously impacted us significantly in 2015, resulting in an over 50 per cent loss of activity from previous year averages," said PSAC CEO Mark Salkeld. "With those same factors continuing, we can't expect anything better for 2016."

The group is basing its drilling assumptions on crude prices of $53 a barrel, natural gas at $2.75 a 1,000 cubic feet and the Canadian dollar at 75 cents.

PSAC represents companies that provide drilling and other services to the oil and gas sector. So when producers scale back their output due to low prices, PSAC members see a drop in their business, too.

U.S. benchmark crude prices are currently near US$48 a barrel — below what many producers need to make ends meet.

When PSAC issued its original 2015 forecast in October 2014, it was expecting crude prices of US$85 a barrel.

The Canadian Association of Petroleum Producers has estimated 36,000 jobs have been shed in the oil and gas industry this year, mostly in Alberta.

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