Hillcrest Petroleum Closes First Tranche Of Private Placement
Hillcrest Petroleum Closes First Tranche Of Private Placement
Momentum Public Relations
Press Release: July 7, 2017
VANCOUVER, B.C. / TheNewswire / Hillcrest Petroleum Ltd. (the “Company” or “Hillcrest”) announces that the Company has closed a first tranche of its $500,000 non-brokered private placement (the “Offering”) originally announced on May 10, 2017 with an update announcement on June 29, 2017.
Aggregate proceeds of $279,640 were raised on this first tranche closing. 3,994,857 units (the “Units”) at a price of $0.07 per Unit were issued. Each Unit consists of one common share in the capital of the Company (a “Share”) and one-half of one common share purchase warrant (a “Warrant”). Each Warrant entitles the holder thereof to purchase one additional Share at a price of $0.10 per Share until July 7, 2019.
There were no finder’s fees paid on this first tranche closing.
All securities issued in connection with the Offering are subject to a statutory hold period of four months plus a day in accordance with applicable securities legislation expiring on November 8, 2017.
The net proceeds received from the Offering will be used to retire the remainder of the secured debt, licensing and registration costs in both Saskatchewan and Alberta and for general operation and expenses.
The balance of the Offering is expected to close on or before July 14, 2017.
For more information on Hillcrest Petroleum Ltd, contact Don Currie toll free at 1-855-609-0006 or visit the Company’s website at www.hillcrestpetroleum.com
ON BEHALF OF THE BOARD
Donald Currie
Chief Executive Officer and Director
Cautionary Statement Regarding “Forward-Looking” Information
Some of the statements contained in this news release are forward-looking statements and information within the meaning of applicable securities laws. Forward-looking statements and information can be identified by the use of words such as “expects”, “intends”, “is expected”, “potential”, “suggests” or variations of such words or phrases, or statements that certain actions, events or results “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements and information are not historical facts and are subject to a number of risks and uncertainties beyond the Company’s control. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Accordingly, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, except as may be required by law.
Neither TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Copyright (c) 2017 TheNewswire – All rights reserved.
- Published in Hillcrest Petroleum, News Home, Oil and Gas
Update on the Oil Crisis in Canada and Abroad
Update on the Oil Crisis in Canada and Abroad
– Momentum Public Relations –
According to financial prognosticators the recession that recently hit Canada will continue to affect Canadians; particularly those who live in Calgary and Edmonton. For instance, according to the Conference Board of Canada, Edmonton’s economy will contract by an additional 1.3{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} in 2016, while Calgary’s economy is expected to shrink by an additional 1.2{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} this year. The continual decline in the two cities economies can be attributed to the decline in the price of oil, and the impact of the steep drop has trickled into other sectors of the economy as well.
Furthermore, job loss numbers are also expected to increase in 2016, as Calgary will suffer from an additional 2.1{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} loss in employment growth, bringing the overall unemployment rate to 7.5{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} this year. Alarmingly, the 7.5{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} unemployment rate is actually higher than the national average, a figure that Calgary has not hit since 1987. Moreover, the sectors that are expected to get hit the hardest by the steep decline in oil prices are the trade and construction industries respectively.
Residents of Edmonton will also not fare that much better, as unemployment rates are expected to hit 7{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} this year; an almost 2 decade high. It should also be noted that the real estate market will also take a subsequent hit from the massive layoffs, as the excess of office space created by all the layoffs will discourage investments in non-residential construction as well as office buildings. De facto, pundits expect a 33{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} drop in housing starts in Edmonton in 2016, while Calgary can expect a housing start drop of 18{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} this year.
What’s more, on March 3rd, 2016, Canadian National Resources Ltd reported an 89{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} drop in quarterly profit ($131 million), due mainly to the steep decline in oil prices. Canadian National Resource Ltd is Canada’s second largest gas and oil producer, and the enterprise is currently projecting capital expenditures ranging from 3.5 to 3.9 billion dollars, in stark comparison to the 4.5 to 5 billion dollar range that they projected in 2015. Annual production values of oil are also expected to drop by 2{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} this year in comparison to last year, and the Calgary/Alberta based entity’s share prices dropped to 12 cents per share in Q4 2015, compared to $1.09 per share during the same period in 2014. In sum, Canadian National Resources Ltd reported that revenues fell by 36{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} to 2.79 billion dollars.
Moving beyond the dire economic situation currently facing Edmonton and Calgary, airplane manufacturing is also expected to take a severe hit from declining oil prices. For instance, airplane retirements for Boeing and Airbus fell to only 28 in Q1 of 2016, compared to 104 in Q1 of 2015. In other words, the decline in oil prices has led to a reduction in demand for more energy efficient aircrafts, because they are currently not seen as a priority from a cost perspective.
Globally, the latest numbers indicate that over one million barrels are being oversupplied every day. That is, the oversupply is being caused by the fact that there are insufficient storage areas to store oil. In fact, the situation has become so dire that some experts are suggesting that pumped oil be stored in swimming pools due to insufficient storage spaces. In addition, oil tankers are also being sent on longer voyages to help reduce tanker pile up debacles at junction ports, as 50 oil tankers are currently remaining stationary in the port of Rotterdam, which is the highest figure being reported since 2009. A similar situation is currently taking place in the United States’ largest oil hub, which is based in Cushing, Oklahoma.
The marked drop in crude oil prices has also forced ExxonMobil to cut its capital spending to only 23 billion this year; a 25{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} drop from the previous year. Russia has also been hit hard by the oil crisis, as the country is currently trying to recover from its own recession. In fact, automotive sales dropped by 36{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} last year, and massive layoffs in plants like the Avtovaz plant in Tolyatti have forced many workers to leave their homes and move in with their parents to make ends meet.
Unfortunately, the global oil crisis is expected to get worse in the future, as many experts believe that the increase in the adoption rates of electric cars will further reduce the demand for gas guzzling vehicles. To learn more about how electric cars can exacerbate the oil crisis please visit here.
- Published in Blog, Business, Energy, Oil and Gas
Energy East Pipeline: Trudeau Vs. Coderre?
The Latest Update on the Energy East Pipeline Conundrum
– Momentum Public Relations –
Prime Minster Justin Trudeau and Montreal Mayor Denis Coderre met behind closed doors on January 26th, 2016 to discuss matters pertaining to the Energy East pipeline and several ongoing infrastructure projects. The Energy East pipeline, if implemented, would carry bitumen to refineries and ports in New Brunswick from Saskatchewan and Alberta. Given rising tensions between Western Canada and Quebec on such matters as of late it seemed fitting that the two leaders would get together to try to resolve their differences on the environmental and financial ramifications of the Energy East pipeline project.
For those unaware, Coderre was criticized by many due to his stance on the Energy East pipeline project. That is, Coderre and over 80 Montreal area communities were vehemently opposed to the construction of the pipeline, triggering a fervent backlash from the West.
Coderre felt that the possible environmental repercussions of the pipeline far outweighed the possible financial benefits that the province would reap from the project. That is, he felt that while the city of Montreal would earn roughly 2 million per year from the pipeline, an environmental disaster brought on by a monolithic oil spill could cost the city upwards of 10 billion dollars to cleanup.
Trudeau, on the other hand, plans to have various political, social, and environmental groups look at the pipeline’s possible social and environmental impact (i.e., greenhouse emissions), giving leaders from different respective groups, including Aboriginal people, a chance to have their voices heard before plans are undertaken.
Furthermore, Coderre spoke openly about finding a balance between sustainable and economical development. For instance, while he accepted the Line 9B pipeline reversal project because the organizers provided comprehensive environmental impact reports, Coderre claimed that there were no viable contingency plans for a global environmental disaster, and that caveats must be addressed before plans were allowed to go forward.
It should also be noted that, just hours prior to the meeting between Coderre and Trudeau, federal environment commissioner Julie Gelfand released an audit that found that the National Energy Board had fallen short of its promise to follow up on compliance issues as well as fail to implement pipeline approval protocols. That is, the National Energy Board had failed to ensure the proper operation of over 70,000 km of existing gas and oil pipelines; which were being maintained and operated by nearly 100 different enterprises.
Ms. Gelfand also stated that, “[She] found that the board’s tracking systems were outdated and inefficient”. In fact, of the 49 cases that were assessed in the audit nearly half (24) had vital documentation that were incomplete, inaccurate, or missing altogether.
As for Mr. Trudeau, he emerged from the meeting with the optimistic stance that Canadians across the map would come onboard of the proposed infrastructure project once the Liberal government had been given the opportunity to overhaul the anemic review process and demonstrate the viable economic growth that such a pipeline project would bring.
De facto, Ms. Gelfand’s report found that the pipelines that were regulated by the Federal government moved over 160 billion dollars worth of gas and oil to international and Canadian markets in 2014. The report also claimed that approving the proposed pipeline construction project, amongst others, would nearly double the existing pipeline capacity in the next 4 years while also investing nearly 25 billion dollars in project development initiatives.
In addition, the report stressed that the energy board would need to work harder to recruit and retain qualified experts; which would not be a daunting task due to the recent massive layoffs that have have hit the oil and gas industry in Canada due to plunging global oil prices.
In sum, while nothing has been finalized between Quebec and Western Canada regarding the proposed Energy East pipeline project, the Federal government has claimed that it will factor in the effects of greenhouse gas emissions to the project’s approval criteria. Moreover, many pundits- including National Resources Minister Jim Carr-have stressed that ongoing consultations must take place between board members and First Nations leaders in order for the public to get behind the impending pipeline projects. For more information on the ongoing debates involving the Energy East pipeline and associated projects please click here.
- Published in Blog, Business, Oil and Gas
Fort McMurray: The Next Canadian Ghost Town?
The continued decline of oil prices reminded me of this article put out about a year ago. This year has taken it’s toll on Fort McMurray and its population. Their lively-hoods as well as Canada’s economy heavily relies on the oil market. Asking the question last year implying that Fort McMurray might be on the road to becoming a ghost town was seen as a ridiculous overstatement by some. The current situation will likely have more convinced that this isn’t a scary campfire ghost story, rather a very harsh reality that has many hard working Canadians questioning where to look next to build their futures.
Can Fort McMurray break the ‘Boom and Bust Cycle?
Momentum Public Relations
The decline of oil prices since last June has caused upheaval in the Canadian economy and world markets. From a global perspective, many countries are in dire straights with oil hovering under $50 per barrel. Major oil producing countries like Russia and OPEC member Venezuela face economic collapse with oil staying at the current price. The volatility in the Middle East with the death of King Abdullah and the presence ISIS make forecasting OPEC̕̕ s oil policy a difficult challenge. On the home front, Alberta is expected to fall $7 Billion short of its forecasted revenue. The Bank of Canada cut the national interest rate to prevent inflation and a housing downturn in light of the oil shock. The current situation has forced Alberta Premier Jim Prentice to consider an unpopular provincial sales tax. News of the federal budget potentially going into a small deficit with oil at the current price presents new challenges to the Harper government in what could be an election year. Plunging oil prices have already started to affect the labour market as oil companies like Shell and Suncor have already started laying-off workers and slashing capital budgets. In the midst of all this, Fort McMurray Mayor Melissa Blake is still hopeful of her town’s prospects. Blake states that residents are still “living life as they alwayshave.”
One would expect a politically savvy person like Blake to respond to crisis with optimistic platitudes. The reality is that Fort McMurray exists solely because of the oil industry and the facile argument of life being the same fails to address issues that residents have to face. In a town of 76,000 people made up of mostly migrant and temporary workers and where housing is at a premium, life has already started to change. Mayor Blake states that “Plants are still in operation, we still have jobs, we get up and go to work every day, and we spend our money just as we normally would”. Business owners beg to differ as they have seen a decline in sales as a result of the downturn.
This isn’t the first time the residents of Fort McMurray have faced economic woes. Residents weathered the most recent downturn in 2009; one which many have called a blessing in disguise. This downturn could last longer a lot longer with companies cutting future projects and more layoffs on the horizon should oil hover at its current price. The uncertainty has forced some residents to put their homes on the market as a precautionary move. While many living in Fort McMurray believe that they can weather the storm, a sustained downturn of could see Fort McMurray become a ghost town.
Sources: Business News Network, Globe and Mail, CTV News, CBC News
- Published in Blog, Oil and Gas
The Canadian Economy is Resilient
The Canadian Economy is Resilient
Momentum Public Relations
The volatility of oil prices has been a major global economic factor for the past few years. The unprecedented price drop from levels of close to $100 a barrel in June 2014 down to the mid 30’s a barrel in December 2105 has had a gigantic ripple effect in every industry and in every part of the world.
As we approach 2016, where will oil prices go and how will this impact the overall economy of Canada? Investors, businesses and consumers are watching closely. To suggest that there is a lot of nervousness in the market is an understatement. Accompanying this concern is a number of forecasts that anticipate further oil price drops. At the same time, other forecasters provide strong reasons why there will be a price recovery. Of course, if anyone was actually capable of making a credible prediction on the price and supply of oil the investment community would be paying much closer attention.
The price of oil impacts the Canadian economy differently when it is contrasted with most of the other larger economies in the world. The difference is due to the complexity of Canada being almost equally a producer and a consumer of petroleum. If Canada was primarily an importer or a major net exporter the help/hurt argument would be much more clear. Canada’s economic sectors that rely on the production of oil are suffering from a drop in prices making a return on investment challenging. The inescapable reality is that lower revenues produce a reduction in profitability. At the same time, other important sectors in Canada, like manufacturing and transportation, stand to benefit from a cost reduction for fuel and raw materials.
The short term pain of lower oil prices may actually be beneficial for Canada in the medium term. Sure, in the short term, there is evidence that this is having a significant negative impact in Canada, particularly in places like Alberta. Lagging indicators such as the low rate of GDP growth, the Bank of Canada’s key interest rate and rising regional unemployment are all cause for concern. Nonetheless, there are three reasons why investors and interested observers should be encouraged to take a slightly longer view of the prospects of Canada’s ability to weather the storm.
- Oil is here to stay. The fundamental need for petroleum products is not about to evaporate. Unlike major transitions in technology that have occurred in history, the need for oil and its derivative products will continue. When wood gave way to coal and coal to the use of oil there were substantial technical advances that accompanied each shift. At the moment there is no game changing technical advance that is emerging to render oil obsolete. With little prospect of diminishing tension in places like the Middle East there will continue to be a need for a reliable supply of oil and gas for big consumers like China, Japan and the USA. Even if the consumption of gasoline fell due to the use of alternative energies there would continue to be a very large need for a wide variety of chemicals, consumer goods and medical products that are manufactured from petroleum. Typical products of this sort are listed on this link.
http://www.ranken-energy.com/products{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}20from{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}20petroleum.htm
- An exceedingly diverse economy. Canada is in a far better position to maneuver and manage in a volatile environment. Countries like Russia, Saudi Arabia and even the United States have more compelling concerns. Russia and Saudi Arabia are undoubtedly being forced to deal with a major budgetary shortfall at the moment. The United States has to make a number of important strategic decisions regarding long term supply in an environment where predicting the future is extremely challenging. Canada, on the other hand, is likely to suffer a relatively small loss of overall revenue and may actually see some stronger growth in the medium term if the Canadian dollar remains weak. The complexities and concerns associated with falling oil prices for a number of countries who have much more to lose is outlined in a recent post by Ravi Srikant.
http://www.investopedia.com/articles/investing/051315/complex-story-global-impact-low-oil-prices.asp
- Cities emerging as wealth hubs. The growth of the Canadian economy is, like most major economies in the world, increasingly centered in cities rather than in resource extraction or the sale of commodities. There are six Census Metropolitan Areas (CMAs) in Canada that all have relatively high employment levels and continue with a track record of significant job growth. They are Montreal, Toronto, Vancouver, Ottawa-Gatineau, Calgary and Edmonton. These locations account for roughly 50{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} of Canada’s employment and consequently are a major centre for wealth creation. A great amount of the economic activity in cities comes from the development of new technologies that make new services and product possible. This phenomenon is displayed in Professor Livio Di Matteo’s graph.
http://www.macleans.ca/wp-content/uploads/2015/11/Di-Matteo.png
Some people believe that history repeats itself. In the case of oil, that would mean that the world will see prices that move higher before very long. The theory that what goes up must come down (and vice-versa) is a compelling one. It may be more important to learn from history rather than be resigned to it. Short term issues aside, Canada’s wealth of natural resources is complimented by its open economy and well educated workforce. The future price of oil is anyone’s guess. The future of the Canadian economy, however, isn’t dependent on low or high priced oil. It is dependent on making wise choices around new technologies and ensuring that the cities, that are driving growth, are adequately resourced and that the infrastructure they require to compete effectively on the world stage is second to none.
- Published in Blog, Business, Oil and Gas
Sales tax out of question for Albertans
In true Albertan style, citizens reject the proposed sales tax making it difficult for Premier Prentice to attack the budget shortfall.
Albertans reject sales tax to fill budget gap
By Andrea Janus
Source :Business News Network
Nearly three quarters of Albertans are opposed to a provincial sales tax to help fill the revenue gap left by falling oil prices, according to a new poll.
Alberta Premier Jim Prentice recently floated the idea of a sales tax to make up for a projected $7 billion budget shortfall. While no decisions have been made, and Prentice himself has said he is “not embracing” a sales tax, the idea appears wildly unpopular with voters.
In a survey of 3,184 Albertans, Mainstreet Technologies asked whether respondents approve or disapprove of a PST to balance the budget. The results showed that:
· 73 per cent of decided residents disapprove.
· 27 per cent approve.
Of those who disapprove, 53 per cent said they “strongly” disapprove, while 20 per cent “somewhat” disapprove.
When asked what type of tax increase they would favour the most in order “to raise additional revenues in the future,” only 11 per cent of decided residents favoured a provincial sales tax.
· 18 per cent favoured higher energy royalties.
· 21 per cent favoured a personal income tax increase.
· 22 per cent favoured a health care premium.
· 28 per cent favoured user fees or sin taxes.
Meanwhile, asked how the province should deal with the coming budget shortfall — cut spending, run a bigger deficit, increase borrowing, or raise taxes — 55 per cent of decided respondents said the province should cut its own spending. Only 19 per cent said “raise taxes,” 14 per cent said “bigger deficits,” while 12 per cent said “increase borrowing.”
The findings suggest Prentice has “a huge uphill battle” on his hands if he wants to move forward with a sales tax, pollster Quito Maggi told CTV Calgary.
However, the popular solution isn’t always what’s best for voters, University of Calgary political scientist Melanee Thomas said.
“It’s kind of like eating your vegetables,” Thomas told CTV. “Just because you don’t necessarily like doing it, doesn’t mean that you don’t do it, because it’s the best thing for you.”
In fact, now may be the right time for Prentice to introduce a sales tax when the political opposition is so weak. Much of the Wildrose Party caucus recently crossed the floor to join the governing Progressive Conservatives, leaving just a handful of opposition MLAs behind.
“With the absence of a viable alternative, you’ve got to wonder whether or not it’s as suicidal as some might think it would be,” Thomas said.
Economists tend to favour consumption taxes, such as sales taxes, over increases to income taxes, Todd Hirsch, chief economist at ATB Financial said Monday.
However, Maggi said that sin taxes and user fees will not bring enough in to provincial coffers to balance the budget.
“When we looked at how Albertans want the Premier to deal with the upcoming budget the most popular idea was to cut spending – but there just isn’t much to cut,” Maggi said in a statement accompanying the poll results.
“This really places the PC government and the opposition parties in a tough bind. A PST has the most potential to raise revenue, but Albertans are firmly opposed.”
Reaction on the street in Calgary was mixed on Monday. Some residents acknowledged that the government likely has little option if oil prices remain low. However, others reflected the poll’s findings of strong opposition.
“We have the Alberta advantage now,” one woman told CTV. “But I think if we put that in the province, then we’re basically the same as all the other provinces.”
- Published in Blog
Canada’s forecast takes hit as IMF cuts global growth outlook again
As your Investor Relations firm, it is our job to keep you posted on the latest market news
By: David Parkinson
Source : Business News Network
The International Monetary Fund has again cut its forecast for both global and Canadian economic growth, as the plunge in oil prices widens the rifts in the world economy.
The IMF’s World Economic Outlook Update (WEO), unveiled in Beijing on Tuesday morning local time, forecast global growth of 3.5 percent in 2015 – slightly higher than last year’s modest 3.3-percent expansion, but down from 3.8 per cent in the IMF’s previous outlook in October. It reduced its 2016 forecast by the same amount, to 3.7 per cent from October’s 4 per cent.
This is the third successive quarterly report in which the IMF trimmed its global growth forecast for the current year.
The international financial body cut its forecast for every major economy except one: The United States. It raised its 2015 forecast for U.S. growth to 3.6 per cent from its October forecast of 3.1 percent and up strongly from 2014’s 2.4 percent. It raised its 2016 U.S. forecast to 3.3 percent from 3.0 percent.
The IMF’s growth forecast for Canada is now 2.3 percent in 2015 and 2.1 percent in 2016, down from its previous call of 2.4 percent in both years. Canada’s 2014 growth was estimated at 2.4 percent.
“Oil exporters, for which oil receipts typically contribute to a sizable share of fiscal revenues, are experiencing larger shocks in proportion to their economies,” the IMF said.
The report said the dramatic drop in oil prices should be a net positive for the world economy. However, exporters of oil and other commodities will be slowed by the sharp price declines – including many emerging-market regions that had been relied upon for strong contributions to global growth.
“Developments since the release of the October WEO have conflicting implications for the growth forecasts. On the upside, the decline in oil prices driven by supply factors … will boost global growth over the next two years or so by lifting purchasing power and private demand in oil importers,” the report said. “However, the boost from lower oil prices is expected to be more than offset by an adjustment to lower medium-term growth in most major economies other than the United States.”
“Our forecasts reflect the increasing divergence between the United States on one hand and the euro area and Japan on the other,” Olivier Blanchard, IMF economic counsellor and director of research, said in remarks prepared for a press conference in conjunction with the report’s release. The IMF noted that this divergence is widening interest rate and currency spreads (in particular, driving up the U.S. dollar and depressing the euro and Japanese yen), further complicating the economic landscape for many countries.
“At the country level, the cross currents make for a complicated picture,” he said.
The IMF projected euro zone growth of just 1.2 percent in 2015, down from 1.4 percent in the October forecast, although up from 2014’s 0.8 percent. For 2016, the IMF forecast growth at 1.4 percent, down from 1.7 percent in the earlier projection.
The agency predicted that Japan, which slipped into recession in the 2014 third quarter, would see growth of just 0.6 percent in 2015, down from its earlier forecast of 0.8 percent. It trimmed its 2016 forecast slightly, to 0.8 percent.
The IMF also warned of slower growth in China, where the government is seeking to reduce the economy’s credit exposure and reorient toward consumer growth. The agency now sees China’s growth slowing to 6.8 percent this year (down from the previously forecast 7.1 percent) and 6.3 percent next year (down from 6.8 percent), compared with 7.4 percent in 2014.
Blanchard did allow that the net benefit of lower oil prices could prove a stronger global economic stimulant than the IMF is currently anticipating.
“This decline may turn out to be a stronger ‘shot in the arm’ than is implicit in our forecasts,” he said. “Our forecasts may turn out to have been a bit too pessimistic. I very much hope so.”
- Published in Blog
Oil prices slip on record Iraq output
As your Investor Relations firm, it is our job to keep you posted on the latest market news
Oil came fell just under $50 per barrel this morning upon news of Iraq’s record output in December. The news is on top of the Goldman Sachs report issued last week that foreshadowed a rather bleak year for oil.
The small gains that were made on Friday vanished quickly today.The news on Iraq output is in line with OPEC’s position on maintaining their current production pace.
Due to securities violations by China’s 3 largest brokerage firms, the markets plunged with the Shanghai Composite Index falling as much as 8{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} at one point.
This is evidence of structural issues within the Chinese economy as brokerage firms are lending money to enable clients to purchase securities. This coupled with the government’s expected report of slower economic growth helps explains the drop on the market.
————
By Himanshu Ojha
Brent crude oil prices fell below $50 a barrel on Monday after Iraq announced record oil production and the global economic outlook darkened.
Iraqi Oil Minister Adel Abdel Mehdi said on Sunday Iraq pumped 4 million barrels per day (bpd) of oil in December, its highest ever thanks to higher output from its southern terminals and a surge in supply from the north.
Abdel Mehdi said Iraq planned to a big increase in exports from the northern city of Kirkuk and the Kurdistan region, which would increase production to 600,000 bpd from April.
Brent crude traded around $49.40 a barrel early Monday morning, down 77 cents. U.S. crude was trading down 74 cents at $47.95 a barrel.
“There’s still more supply than demand and that’s a situation that will not change in just a few weeks,” said Hans van Cleef, energy economist at ABN Amro.
Oil prices have dropped by more than half since last June as output around the world has soared while demand growth has slowed. Although the International Energy Agency (IEA) said last week a reversal in the trend was possible this year, it added that prices may fall further before rising.
Analysts said prices found some support from a drop in U.S. drilling rigs, signifying a likely fall in production in the future. But they said there was not much room for gains.
“Some positive data points helped to stabilize oil for now … Upbeat IEA comments and a falling U.S. rig count were the latest positive news. While the news was able to halt oil’s price decline, it (is) not enough to turn prices bullish,” Morgan Stanley said in a note to clients on Monday.
China, the world’s biggest energy consumer, is expected on Tuesday to report its weakest economic growth for more than two decades. Data from China’s National Bureau of Statistics showed on Sunday house prices fell for a fourth straight month.
A meeting of the European Central Bank on Thursday will likely see the launch of a government bond-buying campaign, pointing to further euro falls against the dollar as well as to downward pressure on oil prices.
“It is not hard to find evidence of increasing concerns around global economic weakness. Yield curves across the world have been flattening (longer term yields falling relative to short ones), a dynamic typically associated with expectations of weakening economic conditions,” Timera Energy said on Monday.
Source: Business News Network
- Published in Blog, Oil and Gas
Harper’s Oil Dilemma
Alberta, Canada’s wealthiest province started 2014 with a booming economy and expected the same for 2015. In retrospect, that might have been the good old days as Alberta’s economic projections in light of the oil crash have dimmed significantly over the last 6 months. Upon Goldman Sachs announcing their dismal oil forecast , oil hit a 5-year low on Monday. The prospect of the proverbial golden goose dying a slow and painful death is causing ripples throughout the Canadian economy. Suncor announced today it will cut 1000 jobs due to low oil prices and slash their capital budget. Many companies such as Shell are following suit . The Canadian housing market could be affected as rising housing prices correlated to the price of oil increasing. The dreaded ‘R’word was uttered today describe Alberta’s fortunes for 2015 and even a mention of a sales tax by Alberta Premier Jim Prentice illustrates how dire the situation is. The oil collapse has the auto industry in Detroit baffled as to what consumers will want from them. The future of the Keystone pipeline is in jeopardy with President Obama saying he would veto should the bill came across his desk. An insightful article on the future of the pipeline explains the political and environmental challenges placed by Stephen Harper’s Conservatives and how it could affect the heart of the Albertan economy.
- Published in Blog, Oil and Gas
U.S. Senate proposal may leave Canada with a Pyrrhic victory on Keystone XL
By:Paul Koring, The Globe and Mail
Canada’s Natural Resources Minster Greg Rickford was on Capitol Hill again Tuesday pitching Keystone XL, as Senate supporters of the controversial pipeline tried to round up sufficient votes to override U.S. President Barack Obama’s threatened veto of any Congressional attempt to force approval of the project to ship Alberta oil sands crude to the Texas Gulf coast. After meeting Senator Joe Manchin, a West Virginia Democrat and Keystone XL backer, Mr. Rickford said: “I thanked Senator Manchin for his outspoken support of the Keystone XL pipeline project, and Canada as the partner of choice to fulfill the U.S. increasing need for crude imports.” But Mr. Manchin’s backing comes with conditions the Canadian Conservative government and TransCanada Corp., the pipeline giant seeking permission to build the $8-billion (U.S.) project, may find tough to accept. The senator – who believes a veto-proof majority can be achieved – says he plans to back amendments proposed by some of his Democratic colleagues. They would ban the export of oil carried by Keystone XL, require that all future purchases of pipe for the project be bought from U.S. steel makers and force payments into the national oil-spill fund from which Canadian oil sands crude is currently exempt.Many Republicans oppose those amendments and none may survive into the final billNor do any of them appear in the House of Representatives Keystone XL approval bill passed last week. All 54 Republicans in the Senate back Keystone XL, but the Canadian government and other advocates of the project need 13 more votes – meaning 13 Democrats – to forge the two-thirds majority of 67 in the 100-seat Senate needed to override a presidential veto.
Achieving that seems unlikely. Currently, nine Democrats back the legislation that would wrest control of the decision from Mr. Obama, who has repeatedly delayed deciding on the project, which opponents claim will massively add to greenhouse gas emissions by spurring extraction of Alberta’s vast bitumen reserves. No final vote on the Keystone XL approval bill is expected in the Senate until at least next week. But in the first full day of debate Tuesday, the bitter and mostly partisan battle over Keystone XL was waged in terms of its geopolitical significance and whether it would hasten global warming. Giving Keystone XL the go-ahead would allow the United States to reduce imports from places such as Russia, Venezuela and Saudi Arabia, Mr. Manchin said, echoing a refrain long made by the Canadian government, which has painted other foreign suppliers as mostly unreliable and hostile to the United States. In contrast, he lauded Canada as “the most stable regime, the best ally we’ve ever had.”
Alabama Republican Senator Jeff Sessions was similarly pro-Canadian. There’s “no better place” to import oil than from “Canada, our friend and neighbor,” he said. Approving Keystone XL, which, when built, could deliver 830,000 barrels a day, would create “an additional supply from an ally of the United States that will bring down the price of oil,” he said. But opponents continued to portray Keystone XL as a project that would benefit Canadian coffers and worsen global warming. Allowing Keystone XL to proceed would send “the dirtiest oil in the world, from the tar stands in Canada to a tax-free export zone so it can be exported,” Massachusetts Democratic Senator Ed Markey said. “That oil should not come to our country, go right through it and out again.”
Source http://www.macleans.ca/politics/ottawa/stephen-harper-oils-worst-enemy/
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