OPEC – mackaycartoons

Wednesday January 14, 2015

January 13, 2015 by Graeme MacKay

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Wednesday January 14, 2015

The Dominoes Fall Toward Harper

Updated forecasts by TD Economics project that the Conservative government will be in deficit for two years longer than originally planned due to the sudden drop in oil prices and the impact of tax cuts announced in the fall.

Rather than a $1.9-billion surplus in 2015-16 as outlined in Finance Minister Joe Oliver’s fall fiscal update, TD Economics is projecting a $2.3-billion deficit, followed by a $600-million deficit the following year. The return to surplus would be pushed back to the 2017-18 fiscal year.

However, the report cautions that the government has put aside $3-billion a year for unforeseen events and that amount could still be enough to post slim surpluses in the coming years. It would not be enough, though, to allow the government to announce major new spending in the 2015 federal budget. (Source: Globe & Mail)

Meanwhile, the Conference Board of Canada is predicting that Alberta will slip into a recession before the end of 2015.

It says the plunging price of oil is impacting all areas of the economy from corporate investment and hiring to consumer spending.

“The province is certain to suffer, especially on the employment front, from the drop in oil prices — and it is likely to slip into recession,” said a report by Conference Board of Canada economist Daniel Fields.

During Alberta’s last recession, roughly 30,000 jobs were lost and housing starts fell by 75%. If prices do not recover soon, Alberta could take a similar hit, according to the Conference Board. (Source: CBC News)

Tuesday December 9, 2014

December 8, 2014 by Graeme MacKay

OPEC’s decision ushers in new world of oil

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Tuesday December 9, 2014

OPEC’s decision to cede no ground to rival producers underscored the price war in the crude market and the challenge to U.S. shale drillers.

Terence Corcoran: Nobody can truly say what the real price of oil should be — but looking at OPEC’s blowout, the world may be getting closer to the right number. Read on

The 12-nation Organization of Petroleum Exporting Countries kept its output target unchanged even after the steepest slump in oil prices since the global recession, prompting speculation it has abandoned its role as a swing producer. Thursday’s decision in Vienna propelled futures to the lowest since 2010, a level that means some shale projects may lose money.

“We are entering a new era for oil prices, where the market itself will manage supply, no longer Saudi Arabia and OPEC,” said Mike Wittner, the head of oil research at Societe Generale SA in New York. “It’s huge. This is a signal that they’re throwing in the towel. The markets have changed for many years to come.”

The fracking boom has driven U.S. output to the highest in three decades, contributing to a global surplus that Venezuela Thursday estimated at 2 million barrels a day, more than the production of five OPEC members. Demand for the group’s crude will fall every year until 2017 as U.S. supply expands, eroding its share of the global market to the lowest in more than a quarter century, according to the group’s own estimates.

mand for the group’s crude will fall every year until 2017 as U.S. supply expands, eroding its share of the global market to the lowest in more than a quarter century, according to the group’s own estimates. (Source: Financial Post)