Tuesday, 28 October 2014

Oil!

I found these quotes from CBC articles on oil prices, from 2012 and 2014, looked rather peculiar when placed side by side.

CBC April 2012 article [Brent oil @ 120$/barrel]:
""The increase in the price of our oil imports raises production costs for Canadian firms and also puts upward pressure on gasoline prices, since about half of the gasoline purchased in Canada is produced using refined petroleum priced off Brent...That puts downward pressure on Canada's real gross domestic income, dropping the country's spending power to buy foreign goods and services"
CBC October 2014 article [Brent oil @ $85/barrel, and dropping]: 
"On the whole, it's likely to be bad news for Canada's economy", experts said Monday..."The slump in global oil prices couldn't have come at a worse time for Canada...For a country that now produces 4.5 million barrels of crude oil per day, the recent decline in prices …represents a loss of $2.5 billion in annual revenue for producers"
Expensive oil is bad since we aren't the ones refining it (and it seems we're in no position to build our own refineries). Cheap oil is bad since we can't sell Alberta's stuff at profit. As long as oil trades at exactly 100$ we're ok, just like Russia. I don't pretend to understand economies like ours, but sometimes there are moments that seem to defy all logic. Either way it seems we got ourselves some Dutch disease. Here we come!

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