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
- 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)