With Oil at Record Low, Canada Is First Price-War Casualty - Bloomberg:
In the oil price war between Saudi Arabia and Russia, the first big victim is likely to be Canada.
Hit by unfettered supply from the world’s top two crude exporters and reduced demand as a result of the coronavirus, the benchmark blend of crude produced from Canada’s oil sands plunged to a record low of $7.47 a barrel on Wednesday. The fallout: Virtually every barrel of oil now produced there will come at a loss at a time when the energy industry generates 10% of Canada’s gross domestic product and a fifth of its exports.
The losses could spur a stark turnaround for a country that boasted one of the strongest economies in the Group of Seven heading into the crisis, and for Alberta, a province that’s long balanced its budget on the back of its oil royalties. The region was already struggling with a pipeline shortage that curbed growth. The latest blow could spark a “domino effect” across governments, said Dinara Millington, vice president of research at the Canadian Energy Research Institute.
In the oil price war between Saudi Arabia and Russia, the first big victim is likely to be Canada.
Hit by unfettered supply from the world’s top two crude exporters and reduced demand as a result of the coronavirus, the benchmark blend of crude produced from Canada’s oil sands plunged to a record low of $7.47 a barrel on Wednesday. The fallout: Virtually every barrel of oil now produced there will come at a loss at a time when the energy industry generates 10% of Canada’s gross domestic product and a fifth of its exports.
The losses could spur a stark turnaround for a country that boasted one of the strongest economies in the Group of Seven heading into the crisis, and for Alberta, a province that’s long balanced its budget on the back of its oil royalties. The region was already struggling with a pipeline shortage that curbed growth. The latest blow could spark a “domino effect” across governments, said Dinara Millington, vice president of research at the Canadian Energy Research Institute.
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