Here in Alberta I am really enjoying our neoconservative UCP government.  They replaced a government that sough to balance economic investment and diversification with support of the public good.  The UCP essentially tore up that balanced economic plan and went ‘all-in’ on ramping up the Oil & Gas industry and making building pipelines a major campaign promise.

The UCP budget forcast included oil prices to be well north of $50 a barrel.  And here we are speculating that the current oil prices (April/May 2020) may hi the (negative)-40 dollars per barrel figure.

Yep, they were elected on the premise of killing the deficit and now are forecast to run some of the largest deficits in Alberta’s history.  But this is nothing new for Alberta under conservative rule.  Allegiance to the large business sector and Oil & Gas has always been a fixture.  The people of Alberta and the public services they need have always come a distant 10th.

So, the price of Oil has now cratered and is tunneling downward toward the core.  What next dear UCP?

 

“Alberta’s oilpatch history is full of ups and downs, dating back to the province’s first big oil rush more than 100 years ago near Turner Valley. But who would have thought oil would one day be worth less than $0?

On Monday, the price for West Texas Intermediate (WTI), the North American benchmark, fell more than $50 to close at negative $37.63 US.

“It’s certainly not something I ever thought I would witness,” said Matt Murphy, a Calgary-based equity research analyst with Tudor, Pickering, Holt & Co.

“I won’t wager a guess how it may trade [Tuesday]. Could it go worse than negative $40? I don’t know,” he said.

Oil companies in Western Canada and offshore Newfoundland were already drastically reducing costs, slashing payroll and pulling back on oil production in recent weeks with commodity prices hitting multi-year lows. Now, the cuts are being accelerated further with Husky Energy and Crescent Point Energy both on Monday cutting spending more than previously announced.


It was a crazy day on the markets.

WTI prices swung wildly as oil traders began to panic as time runs out to get rid of oil contracts for May. The price of oil is determined by investments known as futures contracts, which are agreements to buy and sell a certain amount of oil at a certain time in the future. Typically, the contracts are bought and sold countless times before the oil is actually delivered to the final buyer.

But the May contracts are set to finalize on Tuesday, meaning anyone left holding one will have to physically receive the oil — and storage options are filling up, especially in the U.S. Midwest. No one wants to be stuck with the oil and traders were willing to take heavy losses to ditch the contracts before they come due.”