By The Canadian Press

OIL DROP

Alberta economy, reeling from coronavirus, takes gut punch due to oil price war

Mar 9, 2020 | 1:33 PM

EDMONTON, AB – Alberta’s oil-based economy, already reeling by reduced demand due to the novel coronavirus, is now getting a gut punch from global prices.

The spiral of oil prices has accelerated due to an all-out price war between Saudi Arabia and Russia.

The price for West Texas Intermediate crude has fallen to US$32 a barrel, down more than $8 from Friday’s close and $26 lower than the price forecast in Alberta’s budget.

Each $1 drop in price represents about $200 million cut from Alberta’s bottom line.

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On Sunday, Alberta Energy Minister Sonya Savage said on Twitter that she is watching developments but noted the energy industry has lowered costs and become efficient over the years.

Premier Jason Kenney has also said his promise to end the deficit by 2023 may not happen.

His United Conservatives won last April’s election on a promise to focus on revitalizing oil and gas while eradicating a string of multibillion-dollar deficits.

The premier was to speak to reporters in Calgary at 2 p.m. Monday to “speak to recent global economic events.”

This report by The Canadian Press was first published March 9, 2020

The Canadian Press