Monthly Archives: April 2015

The Canadian Dollar in Canada’s Oil-Shocked Economy

April 21, 2015 0 Comments

The Canadian dollar had one of its best days of this month on April 15, and it has gained around two cents primarily because of the rebound in Canada’s oil prices. As reported, the central bank of Canada has held its target rate at 0.75 but changed their forecast and prediction for the growth of economy. It was said that the Canadian economy has flatlined somewhat in the first quarter of this year during the initial oil price shock, but the economic perspective is becoming brighter from lot of angles and many now see that the effect of the drop in Canadian oil prices was heavily front-loaded.

With Canadian coin trading hands at 81.39 cents, which is much better than the low of 79.58 it hit before the Bank of Canada released their updated interest decision of rate, analyst predictions are now undergoing adjustments. Around a quarter of the analysts polled by Bloomberg before this decision was made expected a cut that would have sent the Canadian coin lower due to the fact that it would make Canada less compelling for foreign investors. Since the central bank has decided to stand pat, many analysts have changed to a more positive outlook, at least from a currency standpoint.

Canadian oil prices were up as well, primarily because of new information from the United States that shows drillers started to scale down and have stopped a lot of new drilling due to the cratering prices.

The Canadian coin has burst forward in spite of the bleak tone of the latest statements from the Bank of Canada. It is now trading closer to the 86 cents that the bank has proclaimed to be the Canadian dollar’s normal level this year.

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The Effect of the Oil Price Plunge on Canadian Oil Producers

April 21, 2015 0 Comments

Canada’s oil producers are likely to announce the largest plunge in their profits for at least a decade as oil prices have collapsed. Canadian oil producers will drop their earning per share significantly, based on the updated data compiled by Bloomberg. According to the reports a large majority of producers will be pulling back estimates.

Many Canadian oil producers have already hit the brakes, controlling their spending and cutting jobs to manage the oil market meltdown. Some smaller operators are incapable of turning a profit at the present mid-$50 price.

Canadian Oil Producers Reactions to 2015 Oil Prices

The oil drop encouraged the Bank of Canada to slash their first quarter growth in the economy and drop their first quarter forecast to zero from the January forecast of 1.5 percent. Canadian oil producers, which includes those who operates in the Alberta oil sands, have some of the highest costs in the industry and ideally seek a barrel price of about $80 to turn a profit from the most difficult to extract sources.

With oil prices that are improbable to reach those levels that Canadian oil producers desire, market positions could shift this upcoming year. Not all are concerned about the market pullback, however. Read more on the Surface Solutions Inc. blog for current political and economic takes on the 2015 forecasts and the decline of OPEC influence on Canadian oil producers.

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