Sharp drop in global crude oil prices drags down Canadian energy stocks

Fears of a tariff-driven recession has led to a steep drop within the value of crude oil, walloping Canadian power shares and stoking fear concerning the sector’s outlook ought to the weak point persist.

West Texas Intermediate crude, the important thing U.S. benchmark, dropped as little as US$60.45 per barrel at the moment, recovering some floor by early afternoon to hover round a four-year low of US$62.

The power index on the TSX was down 8.5 per cent mid-afternoon on a day when the general Canadian inventory market was off about 4 per cent.

Mark Parsons, chief economist at ATB Monetary, says if the crude value drop finally ends up being sustained, oilpatch firms could throttle again a few of their spending plans for the 12 months.

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However Parsons says these firms are in a a lot better monetary place than they had been when oil costs cratered round 2015 they usually’re additionally benefiting from a narrower low cost on the heavy crude they produce.

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This 12 months’s Alberta finances is forecasting oil costs at US$68 per barrel and the provincial authorities says each US$1 drop within the WTI value throughout the fiscal 12 months means a C$750 million hit to the provincial treasury.

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