Whether it was heating your home or filling up your vehicle, Canadians saw gas and oil prices soar to record highs last year. 2023 will not be much different, say experts.
West Texas Intermediate, a benchmark crude oil in the North American Market, is forecast at US$80 a barrel for 2023, states the report released Jan. 9.
“We’re going to see elevated prices across the country. It’s a very expensive time,” Andrew Botterill, Canada’s national leader of energy and chemicals at Deloitte, told Global News.
“We expect to see relatively high oil prices through the year. And, to be honest, natural gas is also a really similar story,” Botterill said.
“Unfortunately, as consumers, it’s probably going to be expensive to heat our houses and fill our tanks.”
Although inflated costs are anticipated across the country, residents in provinces like Alberta and Saskatchewan may notice slightly lower prices due to close proximity to a lot of production facilities, according to Botterill.
How COVID, Ukraine war triggered the price hike
The price of oil has been on the rise for a few years. In 2021, oil jumped 3.4 per cent from the year before, according to the Deloitte report. In 2022, there was a 6.7 per cent hike.
According to Botterill, for the better part of two years during the COVID-19 pandemic, the demand for oil and gas sectors reduced.
“That meant that a lot of oil companies didn’t invest and didn’t put money into new drilling opportunities and bringing new production online,” he said.
With COVID restrictions lifted and life returning to a certain degree of normalcy, demand has risen to where it stood before the pandemic, or even higher, Botterill said.
“We’re seeing most of the world out of the COVID pandemic and demand is up,” he added.
Coupled with the Ukraine conflict, which has no end in sight, prices are anticipated to remain steep, according to Botterill.
“(It has) taken a lot of volumes that came out of Russia, both natural gas and oil, and essentially neutralized them or removed them from the market,” he said.
According to the Deloitte report, the imposed US$60 a barrel price cap on seaborne Russian crude by European countries, in co-ordination with the G7 and Australia, has added to price uncertainty.
Russia, the world’s second-largest oil exporter, has stated that it will not sell to countries that have accepted the cap.
Werner Antweiler, professor of economics at the University of British Columbia’s Sauder School of Business, expects sanctions against Russia to remain in place through 2023, and infers that supply will be “significantly” impacted.
With countries moving away from Russian oil, Antweiler expects to see an “interesting reshuffling of markets.”
“That reshuffling means that a lot of countries are scrambling to get supplies from suppliers that are considered more secure and reliable,” Antweiler told Global News.
Prices to remain ‘volatile’
“This rerouting going on will probably have an impact on prices,” Antweiler said.
Prices “will be elevated” and remain “volatile,” he added.
“A lot of things are possible on the global political stage, from tensions in Korea to tensions across the Strait of Taiwan,” said Antweiler.
“All of these things are conceivable, but of course, we don’t know if they will happen or not and so what we need to be prepared for is that we are living in a more volatile world. We need to think and anticipate that there will be significant disruption to the supply of energy coming from this uncertainty that we’re living with in the global world.”
According to Botterill, China’s reopening economy after eased COVID restrictions could have “significant” impact on energy needs in 2023.
“As we see China start to open up their economy, will we see another wave of a need to start to move more investment or move volumes in different directions? I think we might,” he said.
“That’s going to create a whole new slew of supply and demand crunches for sure.”
What about natural gas?
As far as natural gas price hikes go, it is a “really similar story,” said Botterill.
In Canada, natural gas production has been steadily growing since late 2020, according to Deloitte’s report.
“But the higher prices in 2022 have not produced the spike in supply that one might have expected,” the report states.
Now, the lack of momentum in gas drilling and associated production reflects the lack of certainty about future prices, it adds.
The “inflationary pressure” on household heating costs is also likely to continue as significant increases in supply don’t look likely.
“With the continued geopolitical uncertainty, the first quarter of 2023 is likely to be just as volatile as the past few quarters but with the added anxiety of a cold winter in full swing,” according to the report.
Impact on diesel
Like other commodities, diesel is also expected to see high prices in 2023.
“The price of diesel is strategic,” said Dan McTeague, president of Canadians for Affordable Energy.
“It is the fuel that is the global workhorse, and it is going to go much higher,” he said.
Speaking on the Roy Green Show on Sunday, McTeague predicted diesel prices this year to mimic 2022.
“We’re going to see a replay,” he said.
“I think we’re looking at $2.75 a litre this summer for diesel.”
A large reason for these expensive prices is due to very strong demands, according to McTeague.
“Post-COVID, economies are going to pick up. We use diesel for everything, from heating to fertilizer, all the way up to jet fuel,” he said.
There’s ‘little’ Canada can do
Jean-Thomas Bernard, economics professor at the University of Ottawa, doesn’t expect oil or gas prices to go much lower in 2023.
“Oil is a commodity that is traded worldwide. It is the most traded commodity,” he told Global News.
With the price of fuel determined on a global scale, Canada has “little control” of just high how prices can get, according to Bernard.
However, the demand for oil is expected to reduce in the future as Canada aims to help tackle climate change and cut back on the use of fossil fuels, Bernard said.
According to Botterill, while many thought Canada may bring on more energy transitions, companies made the decision to “hoard cash, shore up their balance sheets and make sure they’re financially strong,” to prepare for potential volatility.
“We shouldn’t expect companies to go out and dramatically increase budgets. I think they are investing in things like new technologies. They want to move to lower carbon technologies. They want to help with the carbon capture and sequestration,” he said.
FTX founder Bankman-Fried objects to tighter bail, says prosecutors 'sandbagged' him – Reuters
NEW YORK, Jan 28 (Reuters) – Lawyers for Sam Bankman-Fried on Saturday urged a U.S. judge not to ban the indicted FTX cryptocurrency executive from communicating with former colleagues as part of his bail, saying prosecutors “sandbagged” the process to put their client in the “worst possible light.”
The lawyers were responding to a Friday night request by federal prosecutors that Bankman-Fried not be allowed to talk with most employees of FTX or his Alameda Research hedge fund without lawyers present, or use the encrypted messaging apps Signal or Slack and potentially delete messages automatically.
Bankman-Fried, 30, has been free on $250 million bond since pleading not guilty to charges of fraud in the looting of billions of dollars from the now-bankrupt FTX.
Prosecutors said their request was in response to Bankman-Fried’s recent effort to contact a potential witness against him, the general counsel of an FTX affiliate, and was needed to prevent witness tampering and other obstruction of justice.
But in a letter to U.S. District Judge Lewis Kaplan in Manhattan, Bankman-Fried’s lawyers said prosecutors sprung the “overbroad” bail conditions without revealing that both sides had been discussing bail over the last week.
“Rather than wait for any response from the defense, the government sandbagged the process, filing this letter at 6:00 p.m. on Friday evening,” Bankman-Fried’s lawyers wrote. “The government apparently believes that a one-sided presentation – spun to put our client in the worst possible light – is the best way to get the outcome it seeks.”
Bankman-Fried’s lawyers also said their client’s efforts to contact the general counsel and John Ray, installed as FTX’s chief executive during the bankruptcy, were attempts to offer “assistance” and not to interfere.
A spokesman for U.S. Attorney Damian Williams in Manhattan declined to comment.
Bankman-Fried’s lawyers proposed that their client have access to some colleagues, including his therapist, but not be allowed to talk with Caroline Ellison and Zixiao “Gary” Wang, who have pleaded guilty and are cooperating with prosecutors.
They said a Signal ban isn’t necessary because Bankman-Fried is not using the auto-delete feature, and concern he might is “unfounded.”
The lawyers also asked to remove a bail condition preventing Bankman-Fried from accessing FTX, Alameda or cryptocurrency assets, saying there was “no evidence” he was responsible for earlier alleged unauthorized transactions.
In an order on Saturday, Kaplan gave prosecutors until Monday to address Bankman-Fried’s concerns.
“The court expects all counsel to abstain from pejorative characterizations of the actions and motives of their adversaries,” the judge added.
Our Standards: The Thomson Reuters Trust Principles.
Gold declines in light of the report that revealed inflation continues to decline – Kitco NEWS
As of 6:00 PM EST, the February contract of gold futures has fallen for the second time in the last seven trading days. Currently, gold futures are fixed at $1927.60, a decline of $2.40 or 0.12%. Gold traded to a high of $1935.40, and a low of $1916.50.
The key takeaway from today’s PCE inflation index report was that the core PCA index declined in December by 0.3%. The preferred inflation index used by the Federal Reserve was at 4.7% year-over-year in November and declined to 4.4% year-over-year last month.
Both reports will influence decisions made by the Fed at next week’s FOMC meeting.
They will be critical components used by the Federal Reserve next week and will most likely strengthen the conviction of hawkish Fed officials to maintain their extremely aggressive monetary policy. Currently, the Federal Reserve’s forward guidance is composed of additional rate hikes and maintaining elevated rates for a longer time.
The most likely outcome is that the Fed will raise the rate by ¼% at the next two meetings. The Federal Reserve has stated they continue to work to reach its inflation target of 2%. A vast majority of market participants continue to believe that the Fed will backpedal on its commitment to keep rates elevated through 2023.
I will be speaking at the VRIC 2023 (Sunday, January 29-30) at the Vancouver Convention Center. Both Kitco News and I wish to welcome you if you’re available.
For those who would like more information simply use this link.
Wishing you as always good trading,
Afraid to check a bag? Canada's missing baggage woes explained – CBC News
Deborah Cleary was exasperated.
When she landed in Montreal on Dec. 19, following a trip to Italy, she discovered her suitcase was missing. More than a month later, Air Canada still hadn’t found her bag.
“I’ve spent so much time thinking about it, worrying about it, checking online, calling Air Canada,” said Cleary from her home in Plattsburg, N.Y., on Tuesday. “I’m just sort of desperate to get my bag back.”
The post-pandemic return to travel has been turbulent, plagued by mass flight disruptions and missing baggage piling up at airports. That has led to calls for airlines to improve their baggage delivery systems.
“It’s broken, so I think they need to fix that,” said Cleary, who visited the Montreal airport two weeks ago to search for her bag amidst a sea of unclaimed luggage. She didn’t find it.
However, following a CBC News inquiry to Air Canada, Cleary learned on Friday that her suitcase is being shipped to her home.
“I’m very, very happy,” she said. “I had almost resigned myself, I was never going to see it again.”
Canada’s first round of missing baggage chaos erupted in the summer, largely sparked by staffing shortages as airports and airlines scrambled to ramp up operations.
There were high hopes the holiday travel season would go more smoothly — until severe winter storms hit much of Canada, causing hundreds of delayed and cancelled flights, plus a backlog of lost luggage.
“In the airline industry, a delay of greater than 15 minutes generally results in missed connections,” said former Air Canada executive Duncan Dee. “Delays equal missing bags.”
Dee said airlines need to do a better job keeping track of luggage, and the federal government also needs to invest more in airports.
In late December, cold weather caused a baggage belt to freeze at Toronto’s international airport; a fierce snow storm caused widespread flight delays and cancellations at Vancouver’s international airport.
“There’s obviously a need for better infrastructure, better resources for airports … to make them more resilient to these weather events,” said Dee.
What about the airlines?
When asked this week about recent travel chaos, Transport Minister Omar Alghabra said airports will get the tools they need, but did not elaborate.
On the baggage issue, he pointed the finger at airlines.
“I find it extremely frustrating when I hear stories of people not having their luggage for days on end,” he said during an event in Hamilton. “Airlines should be doing more.”
His comments follow several recent media reports about air passengers’ struggles to find their missing luggage
They include the saga of Nakita Rees and Tom Wilson of Cambridge, Ont., who battled with Air Canada for more than four months to retrieve Wilson’s missing suitcase.
The bag vanished during their flight home from Greece in September. Because the couple had put an air tag tracker inside the suitcase, they were able to track its journey to a storage facility in nearby Etobicoke, Ont.
Even though Rees shared with Air Canada the whereabouts of the bag, the airline deemed it lost.
“The most frustrating thing about it was we had no way of getting it, even though we knew the location and we told the airline so many times,” said Rees. “Because the air tags are newer, I just don’t think airlines know how to even use that information.”
The couple finally got the suitcase back this week — after their story was picked up by the media.
Other passengers have also complained about similar experiences when tracking their lost luggage with air tags.
Former Air Canada executive Dee said airlines typically track luggage by scanning their baggage tags and that their systems currently can’t accommodate air tracking technology.
“That’s something where airline processes have not caught up to the technology that’s available,” he said. “No airline in the world has the ability right now to accept information from travellers.”
Alghabra suggested airlines need to change with the times.
“We hear about how Amazon is able to identify where their items [are at] every moment,” he said. “It’s frustrating that airlines still have not modernized their luggage handling system.”
Air Canada told CBC News it’s constantly exploring new technologies. The airline added that its baggage delivery rate has returned to normal, following the stormy holiday weather.
Air Canada said that in Rees’ case, the baggage tag had fallen off the suitcase. The airline didn’t say how it eventually located the couple’s bag, but did indicate that they get to keep the $2,300 in compensation they received for lost luggage.
WestJet said it has launched a strategic review to fine-tune its baggage systems. “[We] are committed to working together with our third-party service partners … to ensure we improve in this area,” said spokesperson Madison Kruger in an email.
Travellers can claim up to approximately $2,350 for luggage that is lost or delayed on an international flight. For delayed baggage on domestic flights, the airlines design their own rules.
Alghabra’s office told CBC News this week the government is exploring ways to strengthen rights for air passengers, including for delayed and lost baggage.
As for passenger Cleary, she had applied for compensation for a lost bag, but said getting it back is a better outcome.
“I would much prefer to have my bag back than any money from Air Canada.”
Samsung Galaxy S23 Ultra: Launch Date, Specs And Twitter Reactions – AugustMan HongKong
RSV, influenza numbers dropping in Manitoba | CTV News – CTV News Winnipeg
Jan. 6 Committee failed to hold social media companies to account for their role in the Capitol attack, staffers and witnesses say – CNN
Silver investment demand jumped 12% in 2019
Iran anticipates renewed protests amid social media shutdown
Search for life on Mars accelerates as new bodies of water found below planet’s surface
Business19 hours ago
Being Charismatic Greatly Benefits Your Job Search
Tech11 hours ago
Oppo Reno8 T 4G Sunset Orange model poses for the camera, revealing key specs – GSMArena.com news – GSMArena.com
Sports23 hours ago
Discover the Best Online Casino in Canada
Investment16 hours ago
Opinion: Now is the time to invest in post-secondary education – Edmonton Journal
Politics23 hours ago
Canadian and American Politics
Media6 hours ago
Trump’s Evolution on Truth Social: More QAnon, More Extremes – The New York Times
Economy12 hours ago
US inflation and consumer spending cooled in December – Al Jazeera English
Art19 hours ago
Wish you could set fire to the last 3 years? A huge flaming art installation is coming to Toronto – CBC.ca