Lamphier: Oil prices plunging again mean Alberta’s economic outlook even worse. ATB trims 2015 growth forecast

Aug 07, 2015

Lamphier: Oil prices plunging again mean Alberta’s economic outlook even worse

Oil prices suffered their worst one-day drop in months Monday, with the August futures contract for West Texas Intermediate (WTI) — the benchmark grade of U.S. light sweet crude — tumbling $4.40 US a barrel to close at just $52.53, barely $9 above the March lows.

Photograph by: Ryan Jackson , Edmonton Journal

With oil prices plunging again, ATB Financial has cut its 2015 Alberta economic growth forecast to a razor-thin 0.4 per cent, down from 0.8 per cent previously and two per cent at the beginning of the year.

Todd Hirsch, chief economist at the provincially owned bank, said the latest downward revision reflects an increasingly sour outlook for global growth in light of the ongoing turmoil in Greece and a rapid cooling of China’s once-hot stock market.

“It’s a bit discouraging when you’re lowering your forecast but I don’t think it has changed too much. We were expecting that oil prices would remain volatile over the summer and now we’re seeing that volatility,” said Hirsch, in releasing ATB’s third-quarter economic update.

“We still expect prices will remain volatile over the summer, but toward the end of the year — maybe mid to late fall — we’ll start to see some stability with prices gradually climbing back up a bit. But we don’t think we’re at the bottom of the trough yet.”

Oil prices suffered their worst one-day drop in months Monday, with the August futures contract for West Texas Intermediate (WTI) — the benchmark grade of U.S. light sweet crude — tumbling $4.40 US a barrel to close at just $52.53, barely $9 above the March lows.

While some traders attributed the sharp drop to Iran’s potential re-entry into already-glutted global oil markets, pending a deal with the West on its nuclear energy program, Hirsch discounted that.
Original article found at: http://www.edmontonjournal.com/search/Lamphier+prices+plunging+again+mean+Alberta+economic+outlook+even+worse/11194399/story.html