The Alberta Government's 2023-24 budget predicts a drop in non-renewable resource revenue, as this year's forecast is estimated to be $18.4 billion, down from the highest-ever resource revenue of $27.5 billion forecast in 2022-23. Will this impact our gas prices?
Gas Buddy's Head of Petroleum Analysis Patrick De Haan explained if this number holds, we can expect gas prices to see a drop from the record highs we saw in 2022-23.
"It's not going to be quite the boom this year for oil companies that it was last year, but still a year of prices being a little bit of elevated compared to where they've been over the last decade or so," he said.
The government's revenue forecast lines up with what oil experts around the world are predicting, but De Haan explained given the market's potential volatility, prices could be higher or lower than anticipated. Given how things look at the moment, De Haan doesn't expect any huge deviations though.
"Last year much of the reason prices were so high was because of the onset of the Russian invasion of Ukraine, so absent another war which at this point is unlikely, it's fairly likely that oil prices and thus gasoline prices are going to be lower this year than they were last year."
Even though the Russia-Ukraine war continues, De Haan said this isn't impacting the world's oil prices as much as it was before, since the war is now entering its thirteenth month and the world has made many sanctions and there's less uncertainty about what to expect.
"We've seen a lot of the measurements that can be taken be taken, and they're not really having a major impact on global oil production and that's why the price of oil is going to be lower this year is because with time, things do tone down a bit, and that's what we've seen."
Strathmore gas prices currently sit at 119.9 cents per litre at most locations, down from 134.9 cents per litre we saw in January.
The full energy and economic assumptions is as follows:
- West Texas Intermediate oil (USD/bbl) $79.00
- Western Canadian Select @ Hardisty (CND/bbl) $78.00
- Light-heavy differential (USD/bbl) $19.50
- Natural gas (CND/GJ) $4.10
- Convention crude production (000s barrels/day) 497
- Raw bitumen production (000s barrels/day) 3,345
- Canadian dollar exchange rate (USD/CDN) $76.20
- Interest rate (10-year Canada bonds, per cent) 3.60
In January 2023, WTI was sitting at $78.12, while WCS was at $49.94.
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