BANK OF CANADA DOWNGRADES ECONOMIC OUTLOOK
- 2019 Q4 GDP growth expectations reduced to 0.3% due to strikes, pipeline shutdowns, weather and inventory adjustments. 2020 Q1 expected at 1.3%.
- Job creation has slowed
- Indication of consumer confidence and spending have been unexpectedly soft
- Bank of Canada left interest rates unchanged but left the door open for an interest rate cut.
- China has locked down 40 million people and has restricted tour packages.
- 32 of China’s 34 provinces have cases of Coronavirus.
- 800 confirmed cases but some individuals are not experiencing a fever.
- Shanghai Disneyland, cinema theatres, part of the Great Wall of China are closed indefinitely.
- Coronavirus has now been confirmed across Asia as well as two cases in the US.
- Chinese tourists spent $130 billion overseas in 2018.
WHAT WOULD A WORLD WITHOUT OIL AND GAS LOOK LIKE?
- Oil and gas is refined into petrochemicals as well as into fuel for transportation and industry.
- Petrochemicals are used in many everyday items including but not limited to:
- Nylon (used in clothes, bristles in a toothbrush or hairbrush)
- Medicine (ie: penicillin, aspirin, cancer treatments, arthritis treatments)
- Plastics (syringes for medical purposes, latex gloves, car components, water pipes, combs, storage containers, tubing, CPAP machines, IV bags)
- Food (fertilizer, packaged foods, milk jugs, canned and jarred foods, food packaging)
- Reusable grocery bags (many are made from polypropylene, a petrochemical)
- Personal Hygiene (shampoo, detergent)
- Casings for batteries, solar panels, phones, televisions, computers
- Fibreglass (used in vehicles, wind turbines)
- Rubber (tires for bicycles, cars, strollers, gaskets for everything from coffee makers to industrial machines)
COST OF PETROLEUM OUTPUT AS MEASURED BY SOCIAL PROGRESS INDEX
(Source: Natural Resources Canada, Tudor, Pickering, Holt & Co., EIA 2018e, Social Progress Imperative, Canoe Financial)
- Canada, Denmark, Norway, Australia are topped 4 out of 60 social progress producing countries
- US ranks #11, Russia 35th, China 41st
- Yemen, Angola, and Chad are last
OIL AND GAS DRILLING
- In 2010, the base decline rate for US shale liquids production was 15.6%; as of 2018, the base decline rate is 37%.
- For US oil production to remain at current levels, they need to drill 13,000 wells per year.
- Oil and gas company bankruptcies in Canada and the US rose 50% in 2019 Y/Y, bringing the total to 208 bankruptcy filings between 2015 and 2019.