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Low oil prices punishing Alberta right now

The Syncrude oil sands extraction facility is reflected in a tailings pond near the city of Fort McMurray, Alberta on June 1, 2014. THE CANADIAN PRESS/Jason Franson
Summary

The price of Western Canadian Select is going to cause some real pain for Albertans.

Todd Hirsch with ATB Financial says this doesn't mean economic disaster for the province yet.

CALGARY (660 NEWS) – The price of Western Canadian Select is going to cause some real pain for Albertans.

Todd Hirsch with ATB Financial says this doesn’t mean economic disaster for the province yet.

“It is going to mean more pain on the energy sector, but they are already operating very lean, very efficiently. Even if there are more layoffs coming, I don’t think they will be significant enough to push the provincial economy back into a recession.”

He believes one of the big reasons for the drop is a lack of access to world markets.

“We don’t know how long this low price environment is going to last, but probably for the next month or so we are looking at a pretty tough environment.”

One of the tough parts about dealing with these prices is the unpredictability of long-term forecasts.

“We do know it can’t go too much lower than it is right now.”

He believes one group will be hit the hardest because of these prices.

“Especially some of the smaller producers that maybe don’t have the bigger refineries or the big integrated operations that can offset some of this.”

He said those job losses could start in the new year or even sooner for some companies.