CANADIAN OIL PATCH / OIL PRICE SURGES UPWARD
Calgary Sun
October 8, 1996
Analyst predicts "Monster Surplus" For Alberta After Price Hits $25/bbl.
CALGARY - Rising crude oil prices and strength in natural gas have the
providence headed toward a "monster" budget surplus, analysts say.
Supply constraints yesterday pushed crude oil prices above $25/bbl.
"The $25/bbl West Texas Intermediate and relatively strong gas prices
are really good for Alberta," said First Energy Capital Corp. oil & gas
analyst Martin Molyneuax. "Our budgets are tuned to a lot lower
numbers than we're getting, so far we're in for a monster surplus here."
Molyneaux said heavy demand and curtailed supply as we move into
the winter months bode well. "The Europeans are tight for supply, No.
America is tight for supply and Asia has a very similar situation," said
Molyneuax. "Supply is going to come from somewhere, but we're
getting into winter and inventories of heating oils are slim in Europe and
here, so the scramble is on."
As well, natural gas prices are well ahead of last year. "In Alberta right
now, we're $0.40 per thousand cubic feet ahead of where we were this
time last year," he said.
The strong - and firm - outlook for oil came on the same day that the
world's best known stock market indicator, the Dow Jones Industrial
Average, crossed the phychologically important 6,000 level for the
first time. The much watched DOW closed at 5,979.81, down 13.05
points, after trading as high as 6,002.17 early during Monday's session.
In Toronto, the TSE 300 Index jumped nearly 26 points, closing at
5,441.52, continuing its string of recent record highs.
Molyneaux said firmness in oil and gas prices is having an impact on
the share prices of Canadian producers, most of which are headquartered
in Calgary. "It is very good and the market is recognizingthat," he
said, noting the TSE Oil & Gas Producers Index is hitting new highs
and closed yesterday at 5,879, up more than 1% from Friday. " It's a
group that's seeing new highs pretty much across the board."
End...........Article written by Geoffrey Scotton |
