Political turmoil adds extra worth to the Canadian oilpatch
Political turmoil in Tunisia, Yemen and Egypt is lighting up the geopolitics-of-oil spotlight in the Middle East again. Oil prices are flaring up without hesitation and are sure to uphold an uncertainty premium of a several dollars over the coming weeks. Of course, the premium will escalate if there is any hint that the unrest is spreading to a significant oil producer in the region.
Indirectly, these unsettling events afar add extra worth to oil in regions like Canada that sport political stability and certainty.
But is the Canadian oil and gas industry ready to deal with the consequences? Even in the absence of Middle Eastern disorder, industry spending has been rising and more rigs have been going back to work in pursuit of oil. Projects in the oilsands have been revving up too, all of which means the Canadian oilpatch is on the verge of being in dire need of more people again.
Figure 1shows the five-year trend in Alberta`s employment numbers for workers engaged in the business of fisheries, forestry, mining, and oil and gas.
Last we checked Alberta`s fishing fleet wasn`t hiring. So, most of the workers being tracked in Figure 1 have boots on the ground in the oilpatch.
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