Quote:
Originally Posted by Mitco39
OPEC decides to keep its production ceiling unchanged despite crude glut, price plunge | CTV News
With oil going down below $70 a barrel things might start changing faster than you think. What I don't get is how the price at the pumps remains virtually unchanged?
Working full time with the Oil and Gas industry I am cautiously watching this playout. I know many of you probably also rely on the industry to support yourselves. Not to mention the tax income that our governments squander away year after year.
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i have been following oil since the summer and it has been tanking drastically since september. aprox 30% loss in value.
for implications of this? well from my understanding the cdn oilsands are profitable around 75-85/barrel. the 75 mark is probably for the larger / efficient firms. immediate effect may not have much implications but look to the bottom lines. if prices stay this low for a substantial amount of times (several quarters) it will cause the profits to be eroded which may ultimately cause the lesser firms to close up shop.
whats the implications for us in canada? well there are many on both ends... lower oil prices = cheaper energy = more manufactures but low oil = tar sands no money = lots of rippling throughout the economy.
in alberta where people started getting smug about being the 'have' province (not too long ago they were have-nots) subsidizing other provinces this could take a drastic turn for the worst. so what happens when lay-offs happen due to production cuts? those LOC's , mortgages, car loans, and debt start to look a lot more daunting without that fat income. something to the magnitutde of avg cdn has 160% debt to income.
good luck though... even if oil goes bust doesn't mean the entire economy would go bust. i can't say the same for the tar sands in particular because they are a 1 trick pony. this sort of reinforces the term 'diversity' and 'dont keep all your eggs in one basket' type mantra.