OIl prices and exchange rate down – bad and good for Saskatchewan

October 15, 2014
For 2014-15, when considering the provincial budget assumptions, it is estimated that :
• a US$1 per barrel change in the average WTI oil price results in an estimated $20 million change in oil royalties;
• a 1 U.S. cent change in the average value of the Canadian dollar results in an estimated $31 million change in non-renewable resources revenue.
Note, this is a full-year average and based on production amounts not deviating either.
The 2014/15 Saskatchewan budget was based on:
  • WTI oil prices are forecast to average US$94.25 per barrel in 2014-15
  • Exchange rate of 91.50
Today:
  • WTI is lower than forecasted at US$82.31 per barrel (not good for Saskatchewan)
  • Exchange rate is lower than forecasted at 88.31 (but this is good for Saskatchewan since we sell our oil and potash in US dollars and thus realise higher revenues)
Eric

About prosperitysaskatchewan

Consultant on Saskatchewan's natural resources.

Posted on October 15, 2014, in Uncategorized and tagged , , . Bookmark the permalink. Leave a comment.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: