Canada’s already sliding economy faces another setback as wildfires ravage the Alberta city at the heart of the world’s third-largest crude oil reserves.
Suncor Energy Inc, Royal Dutch Shell PLC, CNOOC Ltd’s (中國海洋石油) Nexen and Husky Energy Inc are among companies shutting plants or cutting production following the worst wildfire in the province’s history. ConocoPhillips, Imperial Oil Ltd and Statoil ASA were also affected.
The damage to Alberta and its heavy crude industry is still being tallied, with 80,000 people evacuated from Fort McMurray.
Photo: Reuters
Morgan Stanley energy analyst Benny Wong estimated between 400,000 and 550,000 barrels a day of production are offline.
Royal Bank of Canada said in a report that between 900,000 and 1 million barrels a day of oil sands production might be offline because of the blaze, equal to between 35 and 38 percent of the 2.6 million barrels a day of average output forecast for this year.
“Implications could stretch beyond the border of Canada,” said Wood MacKenzie Ltd analyst Afolabi Ogunnaike, who projects output could be curtailed as much as 700,000 barrels a day because of the blaze.
The fire has caused the evacuation of more than 80,000 people in Fort McMurray, the town at the heart of the Athabasca deposit, one of three large bitumen reserves that make up Alberta’s oil sands.
Alberta oil sands production was about 2.5 million barrels a day in February, according to the province’s oil regulator.
“That this adds a heavy headwind to the economy in the second quarter is increasingly clear,” Scotiabank vice president of economics Derek Holt said in Toronto. “The shock that is hitting the heart of Canada’s energy sector only adds to risk of very little growth in Q2 and risk of contraction.”
Canada’s output growth for the second quarter was already forecast to slow to a 1.2 percent annualized pace from 2.8 percent in the first quarter, according to a Bloomberg News economist survey taken before the fires.
The slowdown is being driven by a slump in exports to the US that will only be exacerbated by the oil production disruptions.
The fires also might deepen a recession in Alberta, Canada’s main oil-producing province, which is already reeling from the slump in prices. Ten times the number of people have been displaced by this week’s fire than one in 2011 that triggered a plunge in production and helped bring the nation’s economy to a near halt.
The 2011 fire triggered a 0.2 percent fall in Canada’s GDP in May of that year, led by an 11 percent drop in oil sands production. Oil and gas extraction fell 4.8 percent that month. The disaster slowed national quarterly economic growth to a 0.8 percent annualized pace, though the return of regular production boosted economic growth over the following months.
“That’s just something that adds to the weakness in the second quarter,” said Jimmy Jean, a strategist in the fixed-income group at Desjardins Capital Markets in Montreal.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day