Oil prices fall affect Alberta’s budget badly

Alberta’s finance minister presents an update on this year’s budget which may include more bad news after the collapse of oil prices into the US $40 a barrel range.

Robin Campbell is releasing third-quarter numbers and said the steep plunge in prices has turned this year’s anticipated surplus budget into a $500-million deficit. However, Prentice says the drop has dug a $7-billion hole in the treasury.

Premier Jim Prentice says that  next month’s budget for the upcoming fiscal year will provide a long-term blueprint to get Alberta off the roller-coaster of oil and gas revenues. He has suggested a hike to personal income taxes, but says there will be no increases in corporate taxes or oil royalties.

Oil prices fall on Monday as worries over North America oversupply dragged, and accordingly Brent futures also decreased below $60 a barrel and U.S. contracts hovering around $50.30.

Prices began dipping as analysts said crude markets remained oversupplied after the rise in global markets and euro zone crisis over Greek debt had been averted for now.

Analysts said that a cold spell, which has hit refinery output, could also prevent crude prices from rising further. Major U.S. East Coast refineries have been hit by cold weather, sending up heating oil futures on fears of tight supplies.