How many years ago was it that we were all in a tizzy because oil prices were falling, and falling, and falling, hurting our provincial economy as government coffers were much emptier? It really wasn’t all that long ago, 2014. The price of a barrel of oil had been over $100 until the recession in 2008 when it suffered a steep drop. However, shortly after 2008 it climbed back up over $100 until 2014 when it started to drop again and by early 2016 it was around the $30 level. I’m talking about the benchmark West Texas Intermediate and in US dollars. Western Canada Select oil sells for less due to factors like lack of pipeline capacity and rail bottlenecks. The difficulty in delivering the product means we have to sell our oil for less. A report from Bank of America says we could see $100 oil again by next year. That could be good for us to a certain extent because it would mean more money flowing into the economy as exporters get more per barrel and our government would have more cash to play with, but also not so good for us at the pumps as gas prices could average $1.60 a litre across the country, and on the west coast it could be as high as $1.85. This could speed up the development and deployment of electric cars along with finding more efficient ways to use oil, neither of which may be a bad thing. All we can do is watch and wait to see how things play out.
That’s Coffeetalk. I’m Vic Dubois.