Varcoe: Oil cuts could break up part of Alberta's growth in 2019: report


Awesome news for Alberta came on Friday, as OPEC made a contract to support higher oil prices, the solution to Canadian collapses was lost, and more jobs were created in the & # 39 ; pasture.

But we will not sign it for too long.

A new report launches a warning to the small economic growth opportunities in Alberta in 2019; preventing the new government oil reduction strategy.

The Canadian Conference Board estimates its & # 39; plan to cut oil cutting with 325,000 barrels per day, starting in January, & # 39; Greatest bite out of the domestic output of the continent (GDP) next year.

"It's a critical measure in government unprecedented interventions to reduce prices and promotional prices," he says.

"If it stays throughout the year … 8.7 per cent (oil) decreases around 2.2 per cent from the Alberta GDP in 2018, and could add to a large amount course course for economic decay. "

With the expansion of Alberta's economy with a previous 2.2 per cent, it will be expected that a lost value of converting will be a significant part of the growth in 2019.

"It is a big problem in which the result of the decay will strengthen enough prices to make the difference," said the report.

The energy sector of Alberta is powered by around a quarter of the region's economy, the limitation impact of the important issue for the coming year.

"This needs to be driving down the books and adversely affect the economy. Where we can make sure prices go up longer than the product comes down. … but he does not retire more earnings, "said the reporter's historian, Pedro Antunes, who wrote the report.

"There is a danger that growth is flat, in particular."

It is worth noting that it is not expected that the department will continue to cut at 325,000 pd throughout the next year, but with no scale back to around 95,000 pd after its first season.

Antunes says that the decision could help to develop corporate profits. But this does not seem to stimulate further drilling or employment if producers can not make a product.

The statement still contains another data item to add to its mix when it is & # 39; Considering the decision of the government of Notley to contribute to the result of a lack of piping.

In the long run, restriction should be an effective tool to predict prices, loss of regional security and a deeper reduction in drill work and oil oil services, the Board of the Conference .

These issues can not be forgotten as jobs hang up on the & # 39; balance.

Since their announcement, Western Canada Select (WCS) heavy oil has a discounted price on & # 39; cut from US $ 28.50 barrels a week ago just $ 15 on Friday, according to Net Energy. And the prescribed oil cuts have not yet started.

Other economics are not as strong as affecting their & # 39; plan.

The BMO Financial Group published a report this week saying that it cut its impression of the genuine GDP growth in Alberta the next year in half to 1.2 percent.

The bank believes that there are several things that; "removing the negative place" of the low oil numbers, indicating that the temporary reduction, the price of the oil already has a higher and higher bitter prices to & # 39; Developing a whole philosophy in the department.

ATB, Todd Hirsch, financial leader economist, says he "does not buy it into that disaster" is back to decline, and it is expected that the economy of Alberta will be " Phased construction when oil prices are strengthened.

However, it is worrying that there may be more laws in the energy sector early next year if there are no good shifts in raw markets or by improving market accessibility for Alberta oil.

"Many companies are waiting to see, they are on the edge right now," said Hirsch. "They need to see good news about what's going on."

All this is done for a mixed picture the 2018 economy is declining.

Many Albertans have been looking carefully at their & # 39; a different price for Canada oil in the last few months, as farmers looking at the sky; Try to make God if water comes.

On Friday, the Petroleum Reformation Group and its associates agreed that they would. corresponding to falling prices in the world since October, with oil work cutting with 1.2 million barrels per day in a & # 39; first quarter of the next year.

Raw prices exceeded directly. West Texas Intermediate (WTI) is targeted at $ 52.61 Friday barrel, up to $ 1.12.

The applicant's reduction was greater than the number of expectations that were expected. Together with the move of Alberta, OPEC activities should give more than 1.5 million pd next year.

It could restrain WTI oil prices back to the lower range of $ 60-barrel, at least, analyst Martin King, GME FirstEnergy said.

"A reduction of this level will help as a result of market rebalancing, perhaps a little faster than people think," he said.

"It's not going to solve all our problems. We need to see more reach on markets."

Finally, the Friday report with Statistics Canada was very strong, with 24,000 jobs created in the November area. Alberta unemployment rate came down with a percentage point to 6.3 per cent.

In Calgary, where the rate is overweight over Edmonton, the unemployment number fell to 7.9 per cent, from 8.2 per cent.

Where does this leave Albertans to & # 39; going into your new year? Of course, I think.

Just a week ago, the 2019 sight was tough, because the pain was in her; pipe oil and disturbing investment.

It is not yet fascinating.

Many still have oil pricing, as it is always in this section.

"I'll always hope that the short-term trends we saw over the past week or so translated into something," said Ken Kobly, Head of the Chambers of Commerce Alberta.

"I say that a more optimistic business is a proof – and there is a difference."

Chris Varcoe is a Calgary Herald column column.

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