{"id":1455,"date":"2025-04-05T14:54:24","date_gmt":"2025-04-05T14:54:24","guid":{"rendered":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/?p=1455"},"modified":"2025-04-15T15:10:02","modified_gmt":"2025-04-15T15:10:02","slug":"https-calgaryherald-com-opinion-columnists-trade-war-opec-production-shock-oil-prices-stock-markets","status":"publish","type":"post","link":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/https-calgaryherald-com-opinion-columnists-trade-war-opec-production-shock-oil-prices-stock-markets\/","title":{"rendered":"Varcoe: ‘Market is fearful’ \u2014 Global trade war, increased OPEC production shock oil prices, stocks"},"content":{"rendered":"

\u201cThere’s a lot of uncertainty around how this is going to impact the global economy\u201d<\/p><\/blockquote>\n

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Since U.S. President Donald Trump unveiled his \u201cLiberation Day\u201d tariffs to the world this week, the oilpatch isn\u2019t feeling a whole lot of salvation.<\/p>\n<\/div>\n<\/section>\n

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Benchmark U.S. crude prices have fallen by almost 14 per cent since Wednesday. Canadian oil and gas stocks are off 15 per cent.<\/p>\n<\/div>\n<\/section>\n

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And while Canadian energy exports aren\u2019t being hit by American tariffs, there\u2019s still plenty of\u00a0fallout from the U.S. trade war<\/a>.<\/p>\n

\u201cPeople are hitting the sell button first and asking questions later,\u201d said Martin Pelletier, senior portfolio manager at Wellington-Altus Private Counsel in Calgary.<\/p>\n

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\u201cThere\u2019s a lot of uncertainty around how this is going to impact the global economy and obviously that\u2019s going to drive commodities and demand for commodities, especially oil.\u201d<\/p>\n<\/div>\n<\/section>\n

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On Friday,\u00a0West Texas Intermediate (WTI) crude futures fell<\/a> by almost $5 to close just below US$62 a barrel.<\/p>\n<\/div>\n<\/section>\n

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On the Toronto Stock Exchange, shares in MEG Energy dropped 12.5 per cent on Friday, Vermilion Energy fell 15.6 per cent and Baytex Energy was down 17 per cent.<\/p>\n<\/div>\n<\/section>\n

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\u201cThe market is fearful of the unknown. It\u2019s uncertain,\u201d said Paul Colborne, CEO of Calgary-based petroleum producer Surge Energy, which decreased 11 per cent.<\/p>\n<\/div>\n<\/section>\n

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\u201cI am surprised by the severity of it, but I do think crude bounces back.\u201d<\/p>\n

\"\"Equity markets around the world recoiled as China announced Friday it would respond to the latest U.S. tariffs with its own levies.<\/p>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n

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In the U.S., the S&P 500 decreased six per cent and the Nasdaq fell 5.8 per cent, while the S&P\/TSX Composite Index dropped by 4.7 per cent.<\/p>\n<\/div>\n<\/section>\n

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The latest market turmoil began after\u00a0Trump unveiled plans Wednesday for a 10 per cent tariff by the U.S. on all imports<\/a>, and additional \u201creciprocal\u201d tariffs on about 60 trading blocs or countries.<\/p>\n<\/div>\n<\/section>\n

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Expectations of retaliatory tariffs from other countries has sparked consternation of an economic slowdown, or possible recession, in the world\u2019s largest economy.<\/p>\n<\/div>\n<\/section>\n

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J.P. Morgan chief economist Bruce Kasman increased the odds of the United States facing a recession to 60 per cent, if a trade conflict is sustained.<\/p>\n<\/div>\n<\/section>\n

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While Canada avoided seeing reciprocal tariffs from the U.S., it still faces previously announced levies on the auto, steel and aluminum sectors.<\/p>\n<\/div>\n<\/section>\n

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The country \u201cis not out of the woods,\u201d ATB Economics wrote in a note.<\/p>\n<\/div>\n<\/section>\n

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\u201cWhat has happened is the trade war has gone global,\u201d ATB chief economist Mark Parsons said in an interview.<\/p>\n

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\u201cWe see a much larger indirect hit via weaker global growth, including increased risk of a U.S. recession. And because the trade war has gone global, you are starting to see the global market reaction affecting commodity prices.\u201d<\/p>\n<\/div>\n<\/section>\n

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In Alberta, with an energy-powered economy that relies on exports, the upheaval is being closely watched.\u00a0The\u00a0Alberta government\u2019s new budget projects a $5.2-billion deficit<\/a>.<\/p>\n<\/div>\n<\/section>\n

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A relatively low Canadian dollar and shrinking of the price differential between WTI and Western Canadian Select crude should provide some buffer to the industry and provincial coffers, say analysts.<\/p>\n<\/div>\n<\/section>\n

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The price discount for Western Canadian Select oil closed at US$10.35 a barrel on Friday, according to ATB Capital Markets.<\/p>\n<\/div>\n<\/section>\n

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Almost all Alberta oil and gas will not face any U.S. tariffs as it\u2019s compliant with the Canada-United States-Mexico Agreement.<\/p>\n<\/div>\n<\/section>\n

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Rory Johnston, founder of the Commodity Context newsletter, said strong global demand for heavy crude, sufficient transportation capacity and no tariffs on Canadian oil are all helping to reduce the price differential.<\/p>\n

As for broader oil markets, Johnston said Trump\u2019s tariffs and OPEC\u2019s tripling the pace of planned production increases for May led to a \u201csentiment-based rout\u201d for oil prices this week.<\/p>\n

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Finance Minister Nate Horner during a news conference at the Alberta legislature in Edmonton in March.<\/span>\u00a0<\/span>David Bloom\/Postmedia<\/span><\/p>\n

\u201cThere is significant churn in global markets right now, and oil prices are not immune,\u201d Alberta Finance Minister Nate Horner said in a statement.<\/p>\n<\/div>\n

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\u201cWe are monitoring the situation and expect that oil prices will eventually stabilize. It is too early to say what the medium- to long-term effects will be on the province\u2019s finances or the job market.\u201d<\/p>\n<\/div>\n<\/section>\n

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Statistics Canada reported Friday the province lost 15,000 jobs in March \u2014 after seeing large gains near the end of last year \u2014 while the unemployment rate increased to 7.1 per cent. Employment levels across the country dipped by 33,000 for the month, while Canada\u2019s jobless rate increased slightly to 6.7 per cent.<\/p>\n<\/div>\n<\/section>\n

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Economists and the Bank of Canada have warned recently that companies are delaying hiring and making investment decisions until there is more clarity about the trade situation with the U.S.<\/p>\n

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As for oil markets, the decision by OPEC+ members to bring back more oil output caught many observers by surprise, given the concerns surrounding economic growth and demand.<\/p>\n<\/div>\n<\/section>\n

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\u201cThe tariff sell-off in the stock market is probably bigger than the OPEC situation from a psychological viewpoint, but from a physical viewpoint, the OPEC decision is probably bigger,\u201d said Phil Flynn, senior analyst with the Price Futures Group.<\/p>\n<\/div>\n<\/section>\n

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\u201cThe market is going to be very well supplied.\u201d<\/p>\n<\/div>\n<\/section>\n

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At this point, Colborne doesn\u2019t expect major shifts by the industry because of lower energy prices \u2014 at least not yet \u2014 noting Surge and other producers have hedged some of their oil sales at higher prices.<\/p>\n<\/div>\n<\/section>\n

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\u201cIf it stays in this range, I think you\u2019re going to see a pullback on capital spending,\u201d he added.<\/p>\n<\/div>\n<\/section>\n

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\u201cBut when you look at supply-demand and the fact that low oil prices will actually stimulate the economy, I think it\u2019s pretty short term.\u201d<\/p>\n<\/div>\n<\/section>\n

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Chris Varcoe is a Calgary Herald columnist.<\/em><\/p>\n<\/div>\n<\/section>\n

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Article content<\/div>\n
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cvarcoe@postmedia.com<\/a><\/p>\n

Read here at CalgaryHerald.com<\/a><\/p>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/section>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

\u201cThere’s a lot of uncertainty around how this is going to impact the global economy\u201d Since U.S. President Donald Trump unveiled his \u201cLiberation Day\u201d tariffs to the world this week, the oilpatch isn\u2019t feeling a whole lot of salvation. Benchmark U.S. crude prices have fallen by almost 14 per cent since Wednesday. Canadian oil and […]<\/p>\n","protected":false},"author":229,"featured_media":1456,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_oasis_is_in_workflow":0,"_oasis_original":0,"_oasis_task_priority":"","_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[25],"tags":[],"class_list":["post-1455","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-other-media"],"_links":{"self":[{"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/posts\/1455","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/users\/229"}],"replies":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/comments?post=1455"}],"version-history":[{"count":6,"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/posts\/1455\/revisions"}],"predecessor-version":[{"id":1468,"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/posts\/1455\/revisions\/1468"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/media\/1456"}],"wp:attachment":[{"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/media?parent=1455"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/categories?post=1455"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/tags?post=1455"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}