Calgary oilmen unease

[errolanderson]

Realize this is not directly related to
ag, but it has an overall impact on
Western Canada as many are employed in
the oil and gas business.

There appears to be a growing unease
over the Alberta oil discount to WTI.
Believe it is around $30 to $40 per
barrel which is a massive collapse in
our spot price . . . which believe is
more normally discounted $3 to $5.
Realize this has been mentioned on
Agriville already.

Amazingly, North Dakota's daily oil
production now rivals that of Ecuador
through fracking technology.

Should this continue through 2013, this
could turn into a major blow to the Cdn
economy.The good news is that our fuel
prices could stay down for a very long
time.

Believe Canada is already in-recession,
but it will take till spring/summer
before gov't data catches up.

Fallout likely to continue in our Cdn
housing market (IMO). Foreclosures are
apt to increase in this environment.

Food-for-thought . . . are markets now
at the start of a broad-based pullback
in prices?

Errol

[cottonpicken]

Getting worried about our currency taking a big
jump.

The japan,the europe and the us,are all openly
saying they want to move their currencies lower,if
the canadian dollar only absorbed a fraction of the
capital seeking saftey we would go through the
roof,we are just so small.

[ajl]

The discount from WTI to Edmonton select
was a record $44 per barrel last week
which is why even the Alberta PC's are
nervous. Last springs budget used an oil
price of 99 which every one except them
though was ridiculous. So now AB is
plunging into deficit at an alarming rate.
Don't blame me, I voted WR.

[boarderbloke]

cotton, didn't Switzerland have to fight off that problem a year or more ago? What did they do?

[cottonpicken]

The Swiss are considered safe but do not
remember them doing any policy measures,don't
know.

It's not bad to have a strong currency,unless you
personally export and then compete with imports
to boot.

I have zero doubt about major currencies
restructuring,but as I see the dominoes fall I'm
scared for Canada.

I'm sure wd will set me straight.

[ajl]

Actually the Swiss have been printing
francs like mad and using them to buy up
worthless Euro so that the franc does not
go higher. These worthless Euros are then
lent to Germany making their interest
rates negative and bankrupting the German
pension plan among other things in the
process.

[Burbert]

To heck with the oilies. Alberta's
problem is that it has not got a decent
royalty rate. They is given the oil ta
the oilies. Get a fair return fer the
product then maybe ya could get the public
behind somea the pollution and exploitin
that going on in the tar sands in Fort
McMoney.

[boarderbloke]

ajl, your right, here's two press reports,

http://www.rferl.org/content/Switzerland_Becomes_First_Major_Western_Currency_T o_Devalue_Currency/1509618.html

http://www.swissinfo.ch/eng/business/Switzerland_hit_by_currency_devaluation_race.html? cid=28504670

they started awhile back, longer than I thought.

[ASRG]

What few realize: Alberta is not paid royalties on Western Canadian Select, which is what is always quoted as being at a discount of $40-44 under West Texas Intermideiate.
Western Canadian Select is a mixture of upgraded bitumen, synthetic oil, and condensate. The actual royalty is paid for raw bitumen......at less than $30/bbl. The actual royalty paid is incredibly low, until the "oil sands project" is totally paid for. Theoretically Suncor and Syncrude will reach "payout" in 2015.....at which time royalties might rise as high as 16%.
The oilsands really pay almost nothing. The real benifit is the high paying jobs and taxes collected.

[boarderbloke]

Bakken is condensate, or close to it. It wouldn't surprise me to see drilling slow in SESK as every small town and former village are loading railcars with Bakken oil. They can't get rid of it fast enough. Surprising number of trucks also bringing oil up from N.D. to rail out on CNR, CPR and SSR.
Drilling maybe curtailed to offset leases or leases facing expiry.