Oil Prices with Trump a Win!

Oil Prices Low but Trump Could be the Boost Alberta Needs

Most markets are back to normal after the shock of a Donald Trump win in the US election this week. Although losses and have bounced back, oil still faces pressure due to OPEC's cut in production (see OPEC in the News Again 10/06/16) But Trump is here!

Two Priorities for Trump – Do They Help Canada?

Yes! Alberta oil sands will benefit from trump being president. His goals are to prioritise tax cuts and cut deregulation. It was repeatedly mentioned during Trump's election campaign. He made no apologies for being fossil-fuel friendly and his top adviser on energy, Harold Hamm, expects him to roll back the Obama administration's heavy regulations on the oil and gas industry.

Clean Power Plan Scrapped – Oil Economy Bound to Rebound

Hamm recently told the Financial Times that he believes Mr. Trump will follow the two guiding principles of tax cuts and deregulation as ways to stimulate economic growth. He has also made assurances to reduce dependence on Middle East oil and he has said that he is in favour of the Keystone XL pipeline from Alberta to refineries in the U.S. gulf. That will help the Alberta economy immensely.

Oil Market is Still a Place to Invest

Tom Pickering, founder and chief investment officer of trading the firm Auspice Capital has said that a Donald Trump presidency could mean the return of a risk premium for oil prices.

A risk premium is the return in excess of the risk-free rate of return an investment is expected to yield; an asset's risk premium is a form of compensation for investors who tolerate the extra risk.

Is it all Talk - What Should Canada Do?

What are Trump's real plans? What we know for now, just days after the election is that things are looking up for the oil sands business. According to the Financial Post, TransCanada Corp is still fully committed to Keystone XL. It plans to engage with President Elect Donald Trump and his new administration in the near future.

Christopher Ashby
REAL ESTATE PROFESSIONALS
100, 5810 2 STREET S.W.
CALGARY, AB T2H 0H2
Mobile: 403-680-4479
Office: 403-253-5305
Fax: 403-775-5156
E-mail: chris@yourhomeinalberta.com
Website: http://www.YourHomeInAlberta.com

 

OPEC in the News Again

OPEC in the News Again – A Deal to Make a Deal

Algeria hosted a meeting last week of the OPEC producers. To the surprise of many they managed to reach a deal, that some are calling – A Deal-to-Make-a-Deal. The cartel agreed to cut production in the future by some 700,000 barrels per day to a production band of between 32.5 million bpd and 33 million bpd.

Oilpatch Desperately Needs a Boost Up

With a collective breath of relief the energy sector sighed as it needs a price improvement. Calgary's unemployment rate is near nine per cent. CEO Brian Schmidt, of Tamarack Valley Energy, a junior oil player, anticipates this time of year to be a time of reckoning for many in the industry. Companies who have been lucky or smart enough to have pre-sold or hedged their production will see those hedges run their term. 

But - More Cuts Could Come

According to local Ennahar TV News, Algerian Energy Minister, Nouredine Bouterfa, says, "OPEC members may find that the oil market needs more cuts. We will evaluate the market in Vienna by the end of November and if 700,000 barrels are not enough, we will go up."

OPEC’s Track Record Leaves Many Guessing

As reported by Reuters, now, OPEC is unified and speaks in one voice and this makes everything much easier. "If we need to cut by 1 percent, we will cut by 1 percent." Bouterfa told Ennahar TV. However, OPEC has a reputation for not sticking firmly to its decisions. Therefore, the market is still guessing whether a specific deal will be hammered out in November.

Service Sector Decimated

Mark Salkeld, the president of the Petroleum Services Association of Canada, explains that before the crash two years ago, the association had 235 members representing 60,000 employees and it now has 165 companies with 30,000 workers. Since the sector drills and services wells, it is always the hardest hit in a downturn.

Salkeld said his industry's best hope is in new pipelines. He stated, "Our hope is to get pipelines built, because for the services sector, that's jobs well beyond the pipelines being built, it's the job needed to keep those full with oil and gas."

Christopher Ashby
REAL ESTATE PROFESSIONALS
100, 5810 2 STREET S.W.
CALGARY, AB T2H 0H2
Mobile: 403-680-4479
Office: 403-253-5305
Fax: 403-775-5156
E-mail: chris@yourhomeinalberta.com

Wild Fires Change Calgary House Prices

Wild Fires Change Calgary House Prices

As the smoke lifts we learn that much of Fort McMurray remains standing. Although the impact of the raging fires could have been worse things are still shaky in the oil industry. Oil production has been affected by a temporary hit of one million barrels a day. At least 12 operations have been closed. People need jobs and they may look to Calgary.

Tragedy of Fort McMurray Will Affect Calgary Housing Market

Things aren't as bad as they could've been but over 88,000 people have been displaced. For the people of Fort McMurray, there will be long-term disruption of business operations, lost wages and lost incomes. Where will the evacuees go? This type of environmental misfortune, like the Calgary floods of 2013 is hard to take but like their fellow Albertans, the people of Fort McMurray will no doubt show resilience and recover. However, if they don't get their jobs back soon many will think about moving south. After months of lagging house prices in Calgary we could see them jump.

Economic Landscape Different Now

The wildfire is merely the latest wound to be inflicted on the oil sands economy. Since the drop in oil prices there has also been a shift in thinking about the future of oil in general. As residents of Fort McMurray keep hope that soon, things will return to normal, other influences may make that impossible. Some will still continue to work there but undoubtedly many of them will want homes in Calgary and this could drive up prices.

New Influences in Industry

Concerns are mounting. Continued depressed global outlook for oil prices and obstacles facing the industry, like the debate over more pipeline construction, may mean less work. The people of Fort McMurray may not be able to or may not even want to go back to the old jobs. As doubts remain high, families may choose a more stable job market and Calgary is not far away.

Do you think it is time to buy in Calgary? Should you wait to sell?

Give Chris a call to get more details on the housing market. Tel # 403-680-4479
E-mail: chris@yourhomeinalberta.com