Despite the price of oil hovering around $50/barrel, Suncor announced that its Fort Hills project will go ahead. Suncor will spend ~$1.6B on the project and expects to be producing by the end of 2017.
Fort Hills is ~90km north of Fort McMurray and will be Fly-in-fly-out.
Having trouble keeping track of the multitude of factors affecting the price of oil and the buzzwords associated with them? We are too. Here’s an quick little Encyclopedia of terms relating to oil prices and why they’ve dropped that McLean’s magazine has compiled.
Despite lower oil prices, Imperial Oil ltd is pushing ahead with projects. If the price of oil stays in the ~$50 price range, we may start to see a lot more mergers/acquisitions as large companies with huge cash reserves pick up property/leases from smaller companies who aren’t as able to weather the storm.
Just as we saw during the recession in ’08 & ’09, a slower-paced Fort McMurray will give the city a chance to catch up with infrastructure, give the province more time to twin Highway 63, give developers time to expand and improve on our commercial and retail real estate etc. The contractors bore the brunt of the layoffs, just like what happened during the recession. Locals were mostly unaffected. Here’s a fantastic article from Yahoo Finance that reaffirms that Fort McMurray will be well-prepared when the next up-swing happens. Some might argue that’ll happen sooner than we may anticipate.
OPEC’s Secretary-General Abdulla al-Badri sees a real possibility that oil prices could explode higher to upwards of $200 per barrel in the future.
What he’s stating is that as the world slows its investments in oil production, something we’re intimately familiar with in the Oil Sands, the demand will continue to rise, but the supply will be tapering off.
If supply drops and the demand continues to rise, one might expect the price to increase
Last week, the Bank of Canada cut its target for the overnight lending rate from an already low one per cent to 0.75 per cent, in light of the risk posed to the Canadian economy by slumping oil prices. TD’s economists predict the Bank of Canada will cut its key interest rate again in March.
Bank of Canada cuts interest rate and we hope that banks will be dropping their variable rates to follow suit.
For some, lowered interest rates are a boon, for others, not so much. Here’s a look at how you may be affected by lower interest rates.