TransCanada's 'Energy East Pipeline Project' opens up valuable market
opportunities for Western Canada's 'oil patch' - both at home & abroad
WTI oil prices climb back to world levels in July, lifting prices in
China introduces 'mini-stimulus package' to bolster its economy
TORONTO, July 30, 2013 /CNW/ - After rallying in May, Scotiabank's
Commodity Price Index fell by 4.1% month-over-month (m/m) in June - the
sharpest decline since late 2012.
"The Index will be underpinned in July by a return to stronger oil
prices in Western Canada and the beginning of another upswing in lumber
and oriented strandboard (OSB) prices, after a sharp, seasonal
inventory correction," said Patricia Mohr, Scotiabank's Vice President
of Economics and Commodity Market Specialist. "The All Items Index
remains 1.7% above a year earlier, with Oil & Gas up +17.8%, Forest
Products +1.5% and Agriculture +0.1% just offsetting a -13.6% decline
in Metals & Minerals."
Highlights in the report include:
The advantages of TransCanada's proposed 'Energy East Pipeline
Project': access to less expensive and more secure domestic crude oil,
allowing displacement of imports in Quebec and Atlantic Canada;
improved financial viability of current refineries as well as the
potential for valuable new export outlets for Western Canadian oil - to
Europe and, most interestingly, to India. Refiners in India have shown
interest in Alberta bitumen.
After trading well below Brent in late 2012 (-US$21.90 per barrel) and
early 2013 (-US$18.27), West Texas Intermediate (WTI) oil
prices surged to US$108.05 on July 19, reaching virtual parity with
Brent - the international benchmark. This points to stronger prices for
Western Canadian Select (WCS) heavy and light oil in Western Canada and
improved financial results for producers.
China's State Council announced a 'mini-stimulus package,' scrapping
taxes on small businesses, reducing administrative costs for exporting
companies and creating new financing vehicles for private-sector
railway investment (bonds).
Read the full Scotiabank Commodity Price Index at http://www.scotiabank.com/ca/en/0,,3112,00.html.
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For further information:
Patricia Mohr, Scotiabank Economics, (416) 866-4210, firstname.lastname@example.org; or
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