Latest news with #ClaireFan
Calgary Herald
20 hours ago
- Business
- Calgary Herald
Conflict-driven oil price spikes not sustainable: Report
Article content Continued geopolitical instability is unlikely to drive oil prices high enough for long enough to drive new investment into Canada's oil industry, according to a new report from the Royal Bank of Canada (RBC). Article content RBC economists Nathan Janzen and Claire Fan co-authored the paper Crude calculations: Assessing Canada's vulnerability to oil prices, which was published on Tuesday. Article content Article content Article content It cites the renewed conflict in the Middle East as leading oil prices to fluctuate. The price of West Texas Intermediate (WTI) has swung over the past month from as low as US$61 per barrel at the end of May to a high of near US$74 last Friday. Article content Article content The authors note any high prices that come amid future instability are unlikely to last long enough to convince investors to put new money into the industry. Article content 'Price volatility driven by geopolitical events are unlikely to be viewed as persistent enough to change business investment plans,' the report states. Article content 'Any spikes in prices due to geopolitical instability will not be seen as durable enough to warrant the kind of large capital-intensive investments that have mostly been dormant over the last decade in the Canadian oilsands.' Article content It notes while prices spiked soon after the first reports of military attacks, those prices still fell short of the year's peak price from January and were little unchanged from two weeks earlier. But, it also argues that continued uncertainty or renewed conflict could see prices spike once again. Article content Article content 'Further escalation could push prices higher and create more uncertainty for Canada's already complex economic picture.' Article content Higher oil prices have an overall neutral effect on Canada's gross domestic product, coincidentally boosting revenues in the oil and gas sector and provincial government royalties, while also raising costs for households, according to the report. Article content As of Thursday afternoon, WTI was selling just above US$65 per barrel. Article content The Alberta government's budget for the fiscal year that began on April 1 set a baseline WTI price of US$68 per barrel. It has previously said that $750 million in government revenue swings on every one-dollar change in the price of WTI.
Yahoo
18-02-2025
- Business
- Yahoo
Canada's annual inflation rate ticks up to 1.9 per cent in January amid temporary GST break
Canada's annual inflation rate edged back up to 1.9 per cent in January, after slowing to 1.8 per cent in December. The faster price increases came even as the temporary GST/HST tax break brought some prices down. Statistics Canada said energy prices contributed most to the acceleration, and were partially offset by the tax break. Gas prices increased 8.6 per cent year-over-year in January, compared to a 3.5 per cent annual increase in December. The price of natural gas also rose 4.8 per cent year-over-year, following a 5.5 per cent annual decline in December. The temporary tax break, which went into effect in mid-December, continued to impact certain CPI components. In January, Canadians paid less for food purchased from restaurants, alcoholic beverages, toys, games and hobby supplies. Economists had expected the Consumer Price Index (CPI) to rise to 1.9 per cent in January, according to consensus estimates published by BMO Capital Markets. BMO economists had expected inflation to remain unchanged in January, while RBC had expected it to slow to 1.7 per cent. Scotiabank had forecast a rise to 1.9 per cent. On a monthly basis, CPI increased 0.1 per cent in January. Seasonally adjusted, it also increased 0.1 per cent. 'The tax holiday will continue to muddy inflation readings until March when we can get a cleaner read of the consumer price index that are clear of distortions,' RBC economists Nathan Janzen and Claire Fan wrote in a preview note on Friday before the data came out. Canada's annual inflation rate slowed to 1.8 per cent in December from 1.9 per cent in November, as the temporary tax break brought down the price of restaurant meals, alcohol and toys. Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on X @alicjawithaj. Download the Yahoo Finance app, available for Apple and Android.
