Blog
    Vista Blog

    Dropping Oil Prices No Cause for Panic

    The price of West Texas Intermediate (WTI) crude oil has gone down in the last month. (Image from oil-price.net)
    The price of West Texas Intermediate (WTI) crude oil has gone down in the last month. (Image from oil-price.net)

    A recent article in the Globe and Mail evaluates the economics of projects in Alberta’s oil sands in light of significantly dropping oil prices. The author, an economist with the University of Alberta, concludes that the outlook is nowhere near as bad as many in the province fear.

    The article explores how factors such as the relationship between light and heavy oil prices, the relative values of the Canadian and US dollars, the structure of Alberta’s royalty regime and the long-view perspective taken by oil producers contribute to a stable outlook for projects in the region. Considering these factors and more, the author argues that oil sands projects remain highly viable, with returns likely to exceed the levels used by many producers as thresholds for investment decisions.

    Click here to read the full article on the Globe and Mail’s website.

    Reader Interactions

    Leave a Reply

    Your email address will not be published. Required fields are marked *