It’s a rough day in Calgary.
For starters, OPEC just decided not to budge in its long-standing standoff with US shale oil producers, after failing to come to an agreement on production limits. The cartel actually lifted the cap on how much oil its members can pump out of the ground, though that was only in recognition that they were exceeding the cap anyway.
Because there’s already way too much oil out there, crude prices sank:
While environmentalists might be cringing at the thought of so much unnecessary fossil fuel extraction, residents of Alberta are probably doing so for another reason: Many of their jobs are on the line. The province is home to Canada’s formerly hot tar sands, the North Dakota of the North, and the latest Canadian jobs numbers show that the unemployment rate there has skyrocketed over the last year so, reaching as high as 7% for the first time 2010.
Unlike vastly abundant US oil, which is consumed domestically, much of Canada’s oil is bound for export. Up until oil prices began falling last year, oil represented nearly a fifth of the country’s total exports. Now? Just over 9%.
So if OPEC won’t stop its global oil deluge, production in the US is slowing but still stubbornly high, and you’re an oil-dependent Canadian province whose chief export market is full to the gills, your future is looking pretty bleak.