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With Brent crude trading for just under $60 (U.S.) a barrel, Newfoundland and Labrador – which depends on oil for a third of its revenues – says its deficit for this fiscal year will be nearly $400-million more than previously forecast.

LUCY NICHOLSON/REUTERS

Newfoundland and Labrador's Finance Minister says the deficit for this fiscal year is projected to be $916-million, nearly $400-million more than previously forecast.

The provincial budget last March projected a $538-million deficit but was anchored on an average oil price of $105 (U.S.) a barrel.

Brent crude was trading on Tuesday for just under $60 a barrel, down from a high of $115 in mid-June.

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Finance Minister Ross Wiseman says it costs the provincial treasury about $30-million for each dollar the average price falls below what was forecast.

The province relies on offshore oil for one-third of its revenues. It forecasts average oil prices with help from independent consultants but values have fallen in recent months amid a global supply glut.

Also Tuesday, the federal-provincial regulator for Newfoundland's offshore oil industry announced that there is more oil in the Hibernia offshore site than previously estimated.

The Canada-Newfoundland and Labrador Offshore Petroleum Board says Hibernia is now estimated to have 1.644 billion barrels of oil. That's up from its previous 2010 estimate of 1.395 billion barrels of oil.

Hibernia, which began producing oil in November, 1997, is Newfoundland's oldest offshore site.

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