Sunday, January 25, 2015

Price of Oil and Alberta's Financial Woes

First, let me remind everyone that I am not a financial guru or even a bean counter.  I and everyone I know are enjoying the low prices of gasoline, but I don't even pretend to know why they're so low.  I understand that a bunch of countries in a group called OPEC (including Saudi Arabia) are selling their oil at rock bottom prices and that's driving the world-wide price down.  Low crude prices means low gasoline prices. 

Does that mean those same countries have too much money and can afford to sell their oil cheap or are they trying to force the other oil companies out of business so they can set any price they want?  Or are they just interested in forcing the companies making oil from the oilsands out of business or at least stop them from growing?  I don't understand their thinking, but then again I'm not an oil sheik either!

I feel badly for those working in the oil patch because their jobs are in jeopardy.  I feel badly for Alberta now dealing with far less revenue from oil than they first predicted.  I can't see this lasting.  The world demand for oil keeps going up while the overall world supply keeps going down.  After all, oil is a non-renewable resource.  I see this as a little blip on the screen. I don't think it can last.

I believe that everyone will have to tighten their belts over the next while, until those offshore oil companies get over their greedy little games.   It may make us stronger.  It may give us added incentive to push for diversification a little harder.  It may convince those folks so against pipelines that those same pipelines will make North America less dependent on foreign oil.  It might help them turn their energies toward making the world's safest pipelines, instead of stopping them.

I hope I'm right about this being very temporary.  Let's all hang in there and wait it out!  We can make it!

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