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Credit agency says surging global oil prices will help N.L.'s bottom line
DBRS Morningstar says each US$1 increase in oil prices could add about C$33 million in revenue and help offset the province’s $688 million deficit.
- Surging global energy prices driven by the Iran war could help Newfoundland and Labrador reduce its $688 million budget deficit, according to DBRS Morningstar.
- Premier Tony Wakeham's recent budget assumes an oil price of US$79 per barrel, yet prices have hovered around US$110 for weeks; officials estimate every extra dollar generates about C$33 million in revenue.
- Regulators reported that Newfoundland and Labrador produced nine million barrels of oil in March, about 14 per cent more than last year, with a total value of about $1.3 billion.
- Travis Shaw, a senior vice-president at DBRS, noted the budget reiterates the PC Party's priorities while projecting ongoing debt, though he added, "Newfoundland's exposure to global commodity prices presents material fiscal upside."
- The province's budget excludes potential revenue from a memorandum of understanding with Quebec regarding power from the Churchill Falls hydroelectric plant in Labrador, as the two governments have not yet ratified the agreement.
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Winnipeg Free Press+28 Reposted by 28 other sources
Credit agency says surging global oil prices will help N.L.'s bottom line
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One of the world's largest rating agencies believes that the surge in global energy prices associated with the conflict with Iran could help reduce Newfoundland and Labrador's deficit.
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Battlefords NOWCredit agency says surging global oil prices will help N.L.’s bottom line
ST. JOHN’S — One of the world’s largest credit rating agencies says surging global energy prices related to the Iran war could help tackle the deficit in Newfoundland and Labrador. DBRS Morningstar says the province’s recent budget — with a deficit of $688 million — is based on an oil price of US$79 per barrel. The price has been hovering around US$110 for weeks and the government estimates that every extra dollar is worth about C$33 million in …
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Leaning Left24Leaning Right0Center3Last UpdatedBias Distribution89% Left
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L 89%
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