Alberta’s energy industry, government watch nervously as oil prices hit 4-year low

“This is not a crisis for the industry for the industry. The larger problem will be for the Alberta government in its deficit.”

That is how Richard Masson, an executive fellow at the University of the school of public policy, the influence of plum meters Oil prices That fell on Monday $ 57 US per Barrel about about $ 57 – the lowest in four years.

As the low prices also lead to sink in petrol prices, it is the broader economic influence that is concerned both the industry and government.

The government of Alberta forecast for $ 5.2 Billion for this fiscal year of the expectation that would be average of Western Texas. Per window of Western Texas.

As the sale prize for most Canadian oil, select as Western Canada (WCS) Select in a discounted with WTI – has limited the low prices, it will have limited a huge hole in the province of the province.

Masson darling for every decline in the price of oil – that last one year – it means a $ 750-million hit to the provincial government budget.

“It’s one of those things that pressures on any government program, and all that the government wants to do. If they with greater deficiencies after they have planned, “said. “So these are large numbers, $ 10 billion deficiency.”

Asked for a response of the falling oil prices, the Alberta Finance card have a statement email to go to the entire fish, compared to the budgeted $ 17. Which will be lost some of the earnings. Which will be lost from lower prices. “

Added the Finance Minister’s office, “We will deliver an update for finance on our revenue proflails in August.”

Oil prices have to expect expectations that the world economy will slowly into the news and lead through Saudi-Arab Streak by October – strongly increasing offer on the slump.

“The Saudis is a large producer. They have the ability to apply for a storm much better than someone else,” Masson said.

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“If they stay on this path they will end with a larger market parts, even though it is at a lower price, and eventually that will translate, then a larger market parts when the price goes again.”

Rory Johnston, an energy channel with Commodity-based Commodity context, said as Saudi Arabia continue to follow on his threats, prices even further.

“If we receive further confirmation that opens with this type of full 2.5 million barrel a day, we will not go out of here, Johnston.

“It is almost insured. There is no way this current oil cookies on this current prices can absorb that level of offer without any further pain.”

As the low oil price will be a challenge for government, Johnston said the Canadian oil industry in relatively good shape to the storm weather.

“This is not everywhere at kind of a doomsday scenario for the Canadian oil and gas industry,” said Johnston. “But what will most likely mean that Canadian oil product growth was one of the strongest in the world last year.

“Anything else to be right, if these prices hold, I would expect the pace of growth starting to start slowly slow.”

Johnston said that lower oil prices also have another unexpected benefit because the Americans, it can have the trade deficit in Canada that has been a huge complaint of the US President.

“If it was not for crude oil, the US did the US enjoyed a multi-decade trading excess of Canada,” said Johnston. “Anything else to be equality, lower oil prices will mean a lower trade deficit with Canada.

“We have seen a lot, many times just to take randomly for things, after they have happened to other reasons. The oily prize could shrink, trump could just explain victory then, right?

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