Alberta Oil Sands Bust – Is the end really over?

Alberta recession and the Alberta Oil Sands

What is happening in Alberta these days? With so much happening with the world including the global financial crisis, global credit crunch, and US $33 a barrel oil, it’s no doubt that Alberta would suffer along with the rest of the world. The Alberta Oil Sands was the best thing to happen to Canada in the last ten years. It gave Canada a national treasure that was poised to bring it to the forefront of being a global energy leader. With the high US oil prices at even $50 US a barrel, the Alberta Oil Sands could not have been a safer investment. The Alberta oilsands had many players and investors over the last decade. As with many of the Canadian Industries, Alberta oil and gas industry is also filled with a majority of junior oil and gas companies. The Alberta recession, or what may be just a few negative quarters of growth, may bring a halt to the boom of the last decade. Could we see an Alberta Oil Sands Bust in the near future??? With a global recession, anything is possible and speculation is everywhere. Many of the large Alberta Oilsands companies are finding this an ideal time to go bargain hunting and picking the jewels to add to their portfolio of Alberta oil sands companies and assets.

Global Credit Crunch and Junior Alberta Oil and Gas companies

A global credit crunch means that major financial institutions will not be as willing or able to lend money to fund company projects. Whether the project is to start a new franchise or fund the daily operations of a Junior Alberta oil and gas company, the decisions that are being made these days are quite dire. No major or minor financial institution has been unharmed by the global credit crunch due to the interrelated nature of the business. Junior Alberta Oil and Gas companies are tied to the global credit crunch as their financing is tied to one of the major financial institutions. Another source of their usual financing, the equity markets or stock markets have also been unavailable during this time of global financial crisis. It is for such a reason that the major Alberta Oil sands companies are shopping for the bargains that are starting to pile up as one after another Junior company starts to feel the crunch. Instead of filing for bankruptcy, the next alternative is to sell at a loss and lose all your equity. While some of the Alberta Junior oil and gas companies may make it with some federal and provincial government funding from Canada, this will not help many of them soon enough.

US $33 a barrel Oil and Alberta Oil Sands

With US $33 a barrel oil prices we are seeing a halt in any new Alberta Oil Sands projects. Alberta oilsands projects that are just started or announced to be started are now currently on hold until further notice. Of course no one knows when oil will go up so the timeframe can stretch longer than anyone is comfortable with. Current US $33 a barrel oil seems like an enigma in todays society. With the bustling growth in population in India and China alone, the price of US $33 a barrel oil would seem silly as the current supply of oil is insufficient to meet global demand. The current $33 US a barrel oil price is more of overreaction to the global financial crisis and once confidence builds up we should see a spike in oil prices again. With a spike in oil prices even to a stable $50 US a barrel oil we will see the commencement of a lot of projects overnight.