The past president of the Grande Prairie Petroleum Association says he hasn’t seen such a drastic drop in crude oil prices in his over four decades in oil and gas.
Over the weekend, OPEC and its allies failed to reach a tentative deal after arguments about production cuts between Saudi Arabia and Russia, which in turn kicked off a fire sale in crude oil stock. The lower selling point tanked not only the price of crude but the stock market in both Canada and the United States along with it, with both the TSX and Wall Street suspending trading for brief periods Monday.
As of the opening of the North American markets on Monday, West Texas Intermediate, one of two benchmark commodities for Oil and Gas, was sharing for just over $30 U.S., down from over a $45 price when the markets closed on Friday.
“The industry as a whole has been struggling the last several years because of commodity prices, and this is just one more challenge, and one more nail in the coffin that will have effects on everybody,” says Rob Petrone.
Petrone says the impact will be felt deeply and believes scheduled or planned work on production wells will likely be suspended or shuttered until further notice in Alberta. He adds that is likely only the beginning.
“Not only producing companies but service companies and taxpayers as well, [as] the revenues the government was planning to generate through production will drop significantly.”
Recently, as part of the 2020 Alberta Budget, Grande Prairie-Wapiti MLA and Finance Minister Travis Toews had provincial revenue forecasts based on WTI selling on average of $58 for 2020-2021.
Toews will be in Grande Prairie Thursday as part of a post-budget discussion with the Grande Prairie & District Chamber of Commerce.
