April 2010

[Ally]

RBC survey finds Albertans most interested in homebuying compared to other Canadians

CALGARY, March 8 /CNW/ - Alberta residents are keenly focused on the housing market, with 92 per cent of respondents believing that buying a home is a good investment, according to the 17th Annual RBC Homeownership Survey. On a national level, Albertans are the most likely (13 per cent) to say they are very likely to buy a home within the next two years, and among those looking to buy, they are also most likely (40 per cent) to say they will buy within the next year.

Survey respondents cite good housing prices, favourable interest rates and the opportunity to buy a home as an investment or second home as the primary reasons behind their buying intentions. The RBC survey, conducted by Ipsos Reid, found that Albertans intending to buy a home plan to put down one of the largest down payments ($85,434) compared to Canadians in other regions. This represents 13.6 per cent of their estimated home value, slightly higher than the national average.

Encouragingly, 77 per cent of Alberta residents, the highest level in Canada, believe they`re doing a "good job" of paying down their mortgage. They are also more likely (29 per cent) to have put down a lump sum payment to reduce their mortgage or have doubled up on a mortgage payment to reduce their mortgage (22 per cent).

"Albertans are feeling positive about their housing market and this is a good sign for the economy," said Don Peard, vice-president, Mortgage Specialists, RBC. "Paying down an existing mortgage is a prudent approach and there are a number of other options available that can help you better manage your mortgage and build home equity faster."

The study also shows Albertan mortgage-holders, along with residents of the Prairies, are most likely (75 per cent) to be concerned about interest rate increases in 2010, with 70 per cent, believing that mortgage rates will be higher next year.

Read the full article here.

 

[Ally]

Deal revives oilsands project

Devon Canada`s acquisition of a 50-per-cent stake in the Kirby oilsands projects ups the ante in Alberta`s growing in situ oilsands sector, analysts said Thursday.

As part of a $7-billion asset deal with BP, Devon will acquire an operating interest in the thermal oilsands project in northeastern Alberta, near its existing Jackfish project, for $500 million.

In Devon, BP gains a partner with proven thermal-oilsands expertise as arguably the most successful in situ oilsands operator after companies like Cenovus Energy, said Raymond James oilsands analyst Justin Bouchard.

"Kirby, now that`s a really nice piece of land," he said in an interview.

"It`s prime real estate from an in situ point of view. I think it`s a good deal for everyone. This puts Devon in a very good position."

Read the full article here.

 

[Ally]

Province vows to help industry boost jobs, drilling

The Alberta government`s competitiveness review will spur drilling activity and create jobs in the province, but analysts are unsure if measures designed to spur innovation will close the gap with unconventional shale gas in British Columbia and the United States.

Government officials said one aim of Thursday`s announcement is to encourage innovation and technology as a way of increasing production and reserves, especially in relation to unconventional natural gas development that relies on complicated drilling techniques to unlock the resource.

Government technical documents say the province is hoping to increase oilpatch jobs by 8,000 in 2011-12 and then add 13,000 more annually across the economy by putting unconventional drilling on an equal footing with other provinces and parts of the U.S., where shale gas has helped reverse steep production declines in recent years.

"What we`re seeing is a product that is focused on increasing employment in the oil and gas industry and that`s a key driver for us," said Don Herring, who heads the Canadian Association of Oilwell Drilling Contractors, an industry association that represents drilling companies.

In an interview following the announcement, Herring said there`s no reason why drilling technology used in other parts of Canada and the U.S. can`t be used in Alberta to increase production from mature fields and unconventional gas plays.

Read the full article here.

 

[Ally]

Alberta`s royalty u-turn seen as boon to oil patch

Alberta`s royalty rollback has prompted major producers to contemplate boosting investment in a province that just months ago watched as money flowed elsewhere.

Observers say the Alberta government, which announced on Thursday it is scaling back royalties and studying how to reduce red tape, has narrowed the gap with its competitors, British Columbia and Saskatchewan.

"I would say there will be at least 10 per cent more capital coming into the province," said Chris Seasons, president of Devon Canada Corp., one of Canada`s five biggest natural gas producers.

Shares in Alberta-based energy companies were little moved by the much-anticipated changes, which undid much of a controversial royalty hike imposed in 2009 on everything but oil sands production.

But significant cuts to the top royalty rates for oil and gas, as well as a low 5-per-cent royalty on the first year of production of a non-oil sands well, already has companies like Devon taking another look at the province.

Read the full article here.

 

[Ally]

Global oil demand to hit record in 2010

LONDON - Global oil demand will hit a record high this year, the International Energy Agency (IEA) said yesterday, revising upward consumption estimates as the world economy recovers from recession.

The Paris-based advisor to industrialized economies raised its forecast for world oil demand growth this year to 1.67 million barrels per day (bpd), up 100,000 bpd.

The agency said in its monthly Oil Market Report that world oil demand would reach an average of 86.60 million bpd this year, up from 84.93 million in 2009. The previous record high for world oil demand was 86.5 million bpd in 2007 before the onset of the global financial crisis and economic slowdown.

"There are signs of oil demand picking up in North America and the Pacific, Asia and the Middle East although consumption in Europe still looks weak," said David Fyfe, head of the IEA`s oil industry and markets division.

But the extra demand will largely be met by production from outside the Organization of the Petroleum Exporting Countries. The IEA raised its forecast for non-OPEC output in 2010 by 220,000 bpd to about 52.0 million bpd due to higher output by OECD countries. Overall, non-OPEC supply is expected to rise by about 500,000 bpd this year.

As a result, the IEA estimated demand this year for OPEC crude and stocks would fall by 200,000 bpd to 29.1 million bpd. Oil prices were largely steady after the IEA report, with benchmark U.S. crude oil futures for May trading around US$83.63 per barrel, down US71¢.

Read the full article here.

 

[Ally]

Edmonton house-price slide bucks trends in February

EDMONTON — The cost of a new home fell 3.3 per cent year-over-year in Edmonton in February -- one of only three metropolitan areas that saw 12-month price drops, Statistics Canada said Tuesday.

The other cities with lower prices compared to a year earlier were Victoria, where they fell 5.7 per cent, and Charlottetown, down 1.2 per cent, according to the agency`s new-housing price index.

On a monthly basis, Edmonton new home prices remained flat, up only 0.3 per cent, between January and February.

Across Canada, new-home costs were up 0.1 per cent in February, a slower pace than the previous month.

Economists had expected the federal agency`s price index would be up 0.4 per cent for the month, the same as in January.

Read the full article here.

 

[Ally]

Sinopec deal puts pipeline to West Coast in spotlight

Chinese giant Sinopec`s $4.65-billion entry into Syncrude brought the issue of access to Asian markets back into focus Tuesday as the proposed Gateway pipeline inches toward a formal application to regulators.

Premier Ed Stelmach on Tuesday described the Sinopec deal as a "huge step forward" for Alberta`s economy and an opportunity to open new markets abroad.

"Obviously, it`s a big part of the world that is hungry for energy," he told reporters at the legislature in Edmonton. "Alberta has to grow markets larger than the 350 million people that are in the U.S., to start capturing markets of a billion people or more if we`re going to continue growing our economy into the future."

Industry observers said there is little doubt Sinopec`s acquisition of a non-operated stake in the world`s largest oilsands venture is a prelude to finding a way to ship Canadian production back to China.

Vincent Lauerman, president of Calgary-based Geopolitics Central, said there is no question the Chinese government is eventually aiming to repatriate its share of oilsands production across the Pacific to serve its own domestic needs.

"As a rule, they tie investment deals to supply oil for the home market," he said. "It`s another sign of the Chinese desire to ultimately import oil from Canada."

Read the full article here.

 

[Ally]

Oiler owner files $1.4 billion arena proposal

After years of speculation, the Edmonton Oilers hockey club has made its first formal proposal to build a new arena as part of a billion-dollar downtown revitalization plan.

The team is staying tight-lipped, however, on whether it expects the city to pay for the rink – which observers say will smooth the way for the proposal and keep it from becoming a divisive issue in a municipal election this fall.

Late last week, the team`s owner completed a rezoning application for a 16-acre plot of land on the northern edge of the downtown for a development that would include an arena (with an unspecified seating capacity), a practice rink, two office towers, two condo buildings, two student residences, two hotels, extensive retail space and about 4,000 parking stalls.

Currently, the land is home to parking lots and a casino.

The application, announced Monday, also seeks approval for towers up to 60 storeys, nearly double the height of the city`s current tallest buildings.

"This is about much more than an arena. This is about an opportunity to create a mixed-use district, which will change the way the world sees Edmonton," said Bob Black, vice-president of the Katz Group, run by billionaire Oilers owner Daryl Katz.

Read the full article here.

 

[Ally]

EnCana see `storm clouds coming`

The rush to tap the continent`s massive shale gas resources is fanning the flames of rising costs, one of North America`s largest natural gas producers is warning.

"We see the storm clouds coming," said Jeff Wojahn, president of the U.S. division with EnCana Corp. (ECA-T31.61-0.13-0.41%) Powered by the global recovery, steel prices are expected to rise 6 to 8 per cent this year. Energy prices – which make up 15 per cent of EnCana`s capital costs – are also on the rise, as is the cost of drilling and fracturing wells.

In major U.S. shale plays like the Haynesville in Louisiana/Texas, companies are scrambling to drill huge areas of land in order to prevent their tenure from expiring. That has led to greater demand for services from companies who provide the drilling, pumping and completion work necessary to free gas from dense shale deposits.

"We`re in this situation where a number of the pumping services companies worked at very low cost structures last year to keep their crews busy. Today they`re seeing higher demand and they`re asking for increases," Mr. Wojahn said.

EnCana believes it is largely shielded from rising costs this year, since it has long-term contracts with many of its drilling contractors, and has already bought 85 to 90 per cent of its steel. And any looming cost increases have yet to substantially materialize: inflation in EnCana`s U.S. operations came in at less than 1 per cent in the first quarter.

Read the full article here.

 

[Ally]

More Calgarians on EI than last year: StatCan

CALGARY - More Calgarians are receiving regular Employment Insurance benefits than they were a year ago, according to a report released today by Statistics Canada.

The federal agency said people in Calgary receiving EI grew from 12,310 in February 2009 to 20,060 in February 2010.

Also, at the provincial level, there were 23,060 more people on EI in Alberta this year than a year ago.

In February, there were 57,240 Albertans receiving benefits, which was a slight drop from the previous month of 58,940 people.

Read the full article here.

 

[Ally]

Alberta EI rolls still significant despite drop

EDMONTON — The number of Albertans receiving regular employment insurance benefits fell by 2.8 per cent in February, reported Statistics Canada Thursday.

There were 57,240 EI beneficiaries in February, down 1,700 from a month earlier.

But that decline made only a small dent in the massive buildup of recipients added to the EI rolls during last year`s economic downturn.

Compared to a year earlier, there are 67.5 per cent more EI beneficiaries in Alberta than the 34,180 recipients in February 2009.

Despite the monthly provincial drop, Alberta`s largest centres also saw increases, said the federal agency.

"The number of EI recipients rose in all large centres of Alberta. However the rate of increase in all centres was slower than in previous months," said Statistics Canada.

Read the full article here.

 

[Ally]

Report pegs Cenovus oilsands property at 7 billion barrels

Cenovus Energy on Thursday said it is sitting on more than seven billion barrels of bitumen, according to an independent engineering report.

Calgary-based engineering firm McDaniel and Associates determined that Cenovus` oilsands properties, which it gained in last year`s split with Encana, hold contingent resources of 3.9 to 7.3 billion barrels before royalties, with a best estimate of 5.4 billion barrels economic at an oil price of $61 US.

The estimates will be used to advance regulatory applications for future oilsands projects, the company said in a news release. Cenovus will hold a conference call later this afternoon to discuss the report and said it would provide further detail on development plans in June.

Read the full article here.

 

[Ally]

Edmonton property taxes rise by 6.5%

EDMONTON — The average Edmonton homeowner will see property taxes rise by $149 this year under the final mill rate slated to be passed next week by city council.

This translates into a 6.5-per-cent increase, larger than the overall five-per-cent tax boost approved last December for the 2010 budget, according to a report released Thursday.

That`s because even though real estate prices dropped as of the assessment date last July 1, homes held their value better than some other types of property.

For the second year in a row, the cost of the typical Edmonton home was down about 10 per cent, to $330,000, while the price of apartments declined by roughly 12 per cent.

Read the full article here.

 

[Ally]

Edmonton LRT `huge game changer`

The silver glint of the Century Park LRT station is the main display photo for a Blue Quill condominium listing on real estate agent Mike Muranetz`s website.

"Why pay high property values for location when this half duplex is only a few minutes` commute to the University of Alberta area?" the listing reads. Buyers see the area as a more desirable place to live now because of its proximity to the station, Muranetz said.

"It`s a no-brainer. Obviously, location is important," Muranetz said. "You can walk out the back gate, walk up the trail and, boom, you`re at the LRT in a two-minute walk."

The extension marks the first time the LRT has entered a suburban area so deeply, said ProCura chief operating officer Randy Ferguson, whose company oversees the Century Park Club and Residences condo development at Century Park station.

The idea for the development was conceived based on the fact the LRT would extend to the area, Ferguson said. "It`s a huge game changer."

The development is expected to eventually grow from its current four buildings and 400 residences to 19 buildings and 2,500 residences.

Read the full article here.

 

[Ally]

Edmonton`s Future LRT

Click here for the latest articles on Edmonton`s LRT.

 

[Ally]

Alberta retail numbers show hints of recovery: StatCan

CALGARY - Retail sales in Alberta showed some positive signs in February that consumers are opening up their wallets again following last year`s recession.

Statistics Canada reported today that retail sales in the province rose by 1.0 per cent from the previous month to $4.94 billion and by 5.9 per cent from February 2009.

The federal agency also said that nationally retail sales hit just over $36 billion, representing a 0.5 per cent monthly increase and a 6.4 per cent year-over-year hike.

Across the country, it was the third consecutive month of increases and the federal agency attributed higher sales at new care dealers as a main contributor to the gain in February.

Sales increased in seven of 11 retail subsectors in February, said Statistics Canada. The largest contributor to the overall increase was a 2.9 per cent gain at motor vehicle and parts dealers, where sales rose for the first time since October.

The clothing and clothing accessories stores subsector (4.3 per cent) saw their sales increase in February for a third consecutive month. Sales rose 5.5 per cent at clothing stores and 1.1 per cent at jewellery, luggage and leather goods stores, while they fell 0.7 per cent at shoe stores.

Read the full article here.

 

[Ally]

$80-$100 the new $60-$80

When Sinopec, a Chinese state-owned oil giant, agreed to plunk down US$4.65-billion last week for a tiny slice of Syncrude, it sent a clear message to the world: the Asian superpower thinks prices are going up, not down.

According to analysts, the Syncrude purchase suggests that China is pricing in a long-term oil price well above US$90 a barrel, and possibly over US$100.

It was a sign that prices could keep rising from here. Oil futures have held up over US$80 this month as the International Energy Agency hiked its demand forecast to a record 86.6 million barrels a day in 2010. The IEA also warned that a price above US$80 could have dire economic consequences. Even OPEC has indicated it is uncomfortable with prices much above US$80.

We`ve been down this road before. In 2007 and 2008, crude prices blasted through all kinds of perceived barriers: US$70, US$80, US$100, US$120, before going all the way up to a freakish high above US$147 a barrel.

The end result of that spike was a dramatic drop in demand for oil, which contributed to the worst economic collapse in decades, not to mention a near-80% drop in oil prices.

Read the full article here.

 

[Ally]

The return of oil

Natural gas piped over the Canada-U.S. border and into the New York City borough of Queens helps light up about one in four bulbs in Manhattan`s shimmery Times Square.

Beyond serving a quarter of the Big Apple`s base load electricity needs, Canada is the United States` biggest source of imported crude oil. Minnesota, for example, gets about 83% of its oil needs from north of the border.

While U.S. President Barack Obama may have made much recently of steps to achieve "energy independence," the country`s reliance on imports from Canada -- as well as the volatile Middle East and other nations around the globe --won`t be changing soon and perhaps not for decades.

Mr. Obama`s plan to open up huge swaths of long off-limits parts of the U.S. coast to oil and gas exploration isn`t expected to yield any significant production for five to 10 years.

And that might end up being a bit longer in the wake of this week`s oil spill in the Gulf of Mexico following the fiery blast on a drilling rig, which could give momentum to environmental groups opposed to opening up more of the offshore.

Read the full article here.

 

[Ally]

What the $200 man says now

Celebrity economist Jeff Rubin was not the only one forecasting US$200 for a barrel of crude oil back in the sweaty days of summer 2008. But two years and one recession later, he`s the one who still gets asked about it.

"They certainly ask me a lot more now that it`s US$85 then when it was at US$40," he said with a laugh in a recent interview. He explained: "Back in 2000, I predicted oil prices would hit US$50, and I got just as much disbelief then."

For a while, Mr. Rubin, the former chief economist and strategist with Canadian Imperial Bank of Commerce, had to share the headlines with Arjun Murti, the oil oracle of Goldman Sachs. Mr. Murti also made a US$200 price call around the same time, saying the "super spike" in prices would come as early as 2009.

Of course, that did not pan out, but his team at Goldman came much closer when they later forecast US$30 prices, in December 2008, to the amusement of other analysts.

Mr. Rubin, who quit his job at CIBC in 2008 to write Why Your World is About to Get a Whole Lot Smaller, his bestselling book on the future of oil, is quick to point out that his US$200 call is still technically not wrong.

Read the full article here.

 

[Ally]

Okotoks turns off tap on new housing development

CALGARY - Scarce water resources and rapid growth have collided head-on in Okotoks, where town officials aren`t approving new subdivisions until they can acquire enough water licence allocations.

Water has always been a top concern for the town that relies on the tiny Sheep River southwest of Calgary.

Okotoks has capped future growth at 30,000 people, and it has strict rules about when and where residents can water lawns, as well as fines to enforce them.

The town itself isn`t exactly running dry, but the population boom means Okotoks has nearly tapped out of licences for water use, with about 2,240 million litres allocated last year out of the 2,300 million available.

With developers of the next Okotoks subdivisions keen to start building houses this summer, town leaders say they`re "cautiously optimistic" they can purchase available water licence room from surrounding rural landowners or licenceholders.

"In the meantime, we had to put a rider in the development agreements that if we were not successful, they would not be able to proceed (with developments)," Mayor Bill McAlpine said.

Read the full article here.