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On a day when the price of oil plunged by more than US$5 a barrel to a 16-month low below $67, one of the country`s top economists and an oilpatch expert told the Calgary`s commercial real estate industry that oil will rebound to more than triple digits next year. Before about 1,300 delegates at the Calgary Real Estate Forum on Wednesday, Jeff Rubin, chief economist for CIBC World Markets, said four of the past five global recessions were triggered by huge spikes in oil prices, which peaked at $147 in July. But he said the world oil supply has not grown for the past three years and predicted oil prices will rebound to triple digit levels by next year and could go to even "higher triple digits than we`ve seen before." Martin Molyneaux, managing director for institutional research at First Energy Capital, said he is optimistic about what lies ahead even though we`ve been through a tumultuous few months. He said oil will rise to average $115 next year and in 2010, while natural gas prices will be $8 next year, $8.50 in 2010 and up to $11 by 2012.
Meanwhile, Peter Tertzakian, chief energy economist at ARC Financial Corp., warned yesterday that, like most of North America, Alberta was headed for a recession. "It`s naive to think that we would be immune to recession here, certainly when you start getting into oil prices sub-$70 and if it goes sub-$60 -- which it very well could -- and access to capital is difficult," he said. "People need to recognize that thing that lubricates, which is money, is not there. So the gears are grinding, and it`s not sounding very good." Rubin said Canada is currently in "borderline recession" with recovery in the second half of 2009. He forecast the TSX to climb to more than 12,000 by August 2009. "Energy drives the TSX and the Canadian dollar," he said, adding that in the future we can expect to see a stronger TSX, loonie, and economy.
(Calgary Herald 081023)
Meanwhile, Peter Tertzakian, chief energy economist at ARC Financial Corp., warned yesterday that, like most of North America, Alberta was headed for a recession. "It`s naive to think that we would be immune to recession here, certainly when you start getting into oil prices sub-$70 and if it goes sub-$60 -- which it very well could -- and access to capital is difficult," he said. "People need to recognize that thing that lubricates, which is money, is not there. So the gears are grinding, and it`s not sounding very good." Rubin said Canada is currently in "borderline recession" with recovery in the second half of 2009. He forecast the TSX to climb to more than 12,000 by August 2009. "Energy drives the TSX and the Canadian dollar," he said, adding that in the future we can expect to see a stronger TSX, loonie, and economy.
(Calgary Herald 081023)