These are stories Report on Business is following Thursday, March 7, 2013.
OECD sees oil spike
High oil and gasoline prices may be taxing household budgets now, but just wait.
The price of Brent could surge to between $150 (U.S.) a barrel and $270 by 2020, the Organization for Economic Co-Operation and Development warns.
That would mark a hefty jump from about $111 today, and the recent peak of just shy of $120. The other benchmark, West Texas Intermediate, is just above $90.
While projecting oil prices is difficult, the OECD says, there is a case to be made for surging demand, notably in emerging economies in regions such as Asia, and its impact on costs, hurting economic growth.
“A return of world growth to slightly below pre-crisis rates would be consistent with an increase in the price of Brent crude far above early-2012 levels,” the organization says in a recent report.
“Based on plausible demand and supply equations, there is a risk that prices could go up to anywhere between $150 and $270 U.S. per barrel in real terms by 2020, depending on the responsiveness of oil demand and supply and on the size of the temporary risk premium embedded in current prices due to fears about future supply shortages,” it adds.
“These projections account for a negative feedback effect of higher oil prices on GDP.”
Over that period, the OECD says, total supply would climb by about 14 million barrels a day, probably from Canada’s oil sands and the shale boom in the United States.
Trade picture improves
Canada’s trade deficit narrowed in January as oil bounced back and autos suffered a setback.
The deficit declined to $237-million from $332-million in December as exports climbed 2.1 per cent, outpacing the 1.9-per-cent increase in imports, Statistics Canada said today.
Export prices rose 1.3 per cent, while volumes increased by 0.9 per cent. Imports, in turn, rose almost entirely on volumes.
Exports to the United States, Canada’s main market, climbed 2.6 per cent, largely on oil, and with the rest of the world by 0.9 per cent.
Of note was a 14-per-cent jump in exports to Europe.
Markets still climbing
The great stock rally continues this morning.
Tokyo’s Nikkei gained 0.3 per cent, though Hong Kong’s Hang Seng dipped.
In Europe, London’s FTSE 100, Germany’s DAX and the Paris CAC 40 were up by between 0.2 per cent and 0.4 per cent by about 8:30 a.m. ET.
Dow Jones industrial average and S&P 500 futures also rose.
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