Global unrest making oil sands look even more attractive
February 23, 2011
CALGARY, AB, Feb. 23, 2011/ Troy Media/ – Oil prices spiked to their highest level since the recession this morning, as unrest in several Middle-Eastern countries spooked commodity markets. How this impacts Alberta depends largely on how long the rise lasts for. If instability continues to reign, it could spell good news for investment in Alberta.
As of this morning, West Texas Intermediate (WTI) crude oil for delivery in March traded at over $97 per barrel, up $14 in one week. Behind the rise in prices is rioting, which began in Tunisia but has since spread to Egypt, Bahrain and most recently Libya; the latter of which is the world’s eleventh largest exporter of oil.
The real concern for oil markets at this point is whether the strife will spread to other Middle East countries like Iran, or Saudi Arabia. If unrest looks to be spilling into the larger oil producing countries, look for oil prices to get even crazier.
On the other side of the equation, natural gas prices are not so subject to geopolitical risk because gas tends to be produced and consumed locally (although that is changing slowly). Because of this, North American natural gas prices have barely blinked over the last week.
At this point, the spike in prices is unlikely to have a major impact on drilling or investment in Alberta, since prices take time to filter through into economic activity. However, the upside to the unfortunate turmoil in the Middle East is that it makes Alberta’s relatively geopolitical risk-free oil plays (particularly the oil sands) look even more attractive to global oil companies.
| Dan Sumner, ATB Financial
http://www.troymedia.com/2011/02/23/global-unrest-making-oil-sands-look-...
