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Liked LZ’s analysis, but disagree with the belowing few points:5 r( b$ R$ s. S' Y3 F
# v* Z; `( T; I! A0 Z1. Oil price is irrelevant to the Edm RE market.& j! z4 `" W; |
It does, forget about the law of supply and demand, or the price and value. Even the speculator hot money need to have a basic market, hence enough buyers to support the market activities. Oil and gas is the critical sector provides employment opportunities.. e& R( ^. z! M, Y( j
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2. Oil price.
7 K" Q, ]; W2 r& H" BYou used oil price in 80’s to future support your view. There was no oil sands industry in 80’s, it was all about the conventional oil and gas. So the economics did work back then. See below:& ~, a& X, W: C. a
9 T* _3 \8 G5 N* ?; h( N$ m9 yAnnual Average Domestic Crude Oil Prices5 f6 ^/ g; Z6 |5 s* a
1946-Present [2 Q: \! `: [" _
U.S. Average" D9 T. L( @$ I! ^
(in $/bbl.)# Y4 e- V p: {: ]' l5 V
Year Nominal Inflation Adjusted/ K0 d( `- F# h& J
1946 $1.63 $17.76 $ q6 N1 y* U6 k
1947 $2.16 $20.58
5 V: p: e9 Z5 g0 L1948 $2.77 $24.72
" I, T/ n3 m. ], M) o9 `( t1949 $2.77 $24.99
9 }* g. a- H( l7 r& g1950 $2.77 $24.42
; |4 A3 p* T1 r8 P& n" h1 \, W1951 $2.77 $22.63 8 H e b9 v5 ~
1952 $2.77 $22.20
- t0 x- O/ ]1 u; P( a0 X1953 $2.92 $23.23
& _% C# l& ]% u* }1 [( ~ Z1954 $2.99 $23.61 # n: T; I. } }$ Z; }8 I
1955 $2.93 $23.22
, Q0 I2 a6 Z' C4 z# Y& ?1956 $2.94 $22.96 % E$ ^' g/ g9 N5 D$ @* v3 U; O
1957 $3.14 $23.74
* }; r: a& K% g! M+ @. x0 \6 Y+ ?1958 $3.00 $22.05 % f, F! W& R& P! A# ~" e, _
1959 $3.00 $21.90 ) ` T. X3 ?8 x: o. w6 H# |
1960 $2.91 $20.88
y+ X' K* S# Y5 L2 w( t4 e1961 $2.85 $20.25
6 ^; J$ H+ [7 Z7 t1962 $2.85 $20.05 3 V. G6 z0 E1 Q7 z
1963 $2.91 $20.20 l# }& {" J% M$ t) t& ]
1964 $3.00 $20.56 1 i f0 z, K, ]/ [ r! p+ V8 d
1965 $3.01 $20.30
7 e& A2 [/ i( I3 V1966 $3.10 $20.32
0 `6 l n' `5 Y: s1967 $3.12 $19.84
# T2 K' e2 x) e! R1968 $3.18 $19.41
) J* ^1 K+ N2 X/ E3 L7 q1969 $3.32 $19.22 ( n- F9 F. ^- d) y, @2 T, G$ e- | G: [
1970 $3.39 $18.56 " C$ i: ^8 F8 @* ?* P4 O4 N0 X' N6 F! V
1971 $3.60 $18.88
0 ~& ? [" W; q7 L1972 $3.60 $18.29
7 Q! ^; N- L* ^/ b' t$ p$ `) [5 H1973 $4.75 $22.73 # F) t* D: H% ~- E) N$ J
1974 $9.35 $40.29 ( h0 q" d4 n: d* w0 a
1975 $12.21 $48.21 - g, S% z7 d' d0 p/ X) n
1976 $13.10 $48.91 / q+ b4 U4 a z7 q+ ~9 @
1977 $14.40 $50.48
5 ?3 d. W" Q( _1978 $14.95 $48.71 ) L$ ?# h# z6 z. J7 w) T
1979 $25.10 $73.44 & s6 l- m3 t* p% Z$ v
1980 $37.42 $97.47
- T' U! Z5 l/ Q8 Y& d, \1981 $35.75 $83.54
; ~4 R7 w- k% d8 l3 t: l- }5 N9 T1982 $31.83 $70.07 4 ]5 O7 K ]7 a3 a9 b
1983 $29.08 $62.02
9 D, j' c' g+ P3 A6 \/ Q. ~1984 $28.75 $58.78 8 [9 }# h7 ]$ L7 a8 T% y: z/ E8 K
1985 $26.92 $53.15 6 }# _1 H* d0 Y6 n) w# J' f
1986 $14.44 $27.99 3 H3 E- E" r. x% Q! {& {. A: C; W
1987 $17.75 $33.19
E5 Q( g* T( K( f0 ?1988 $14.87 $26.70 0 A( `3 F6 A n* r+ x9 ]
1989 $18.33 $31.40 ( N3 B+ H& _% |- S- M% \8 f1 c7 m
1990 $23.19 $37.69
0 h3 O3 s8 N% A6 [& U `) v1991 $20.20 $31.51
. H; o5 x5 i8 s4 B- x' K( R1 W1992 $19.25 $29.15 ( Y; u" ~4 V1 W5 D4 w# {6 c4 U3 Z0 C
1993 $16.75 $24.62
1 b, A8 A) ~" W# q1994 $15.66 $22.45
5 |7 ]" _+ |) `* [4 n( m1995 $16.75 $23.35
2 A: ?5 Z0 D3 [, V2 d: l g4 `9 G1996 $20.46 $27.71
( i9 ]3 c) h/ W) `$ T6 Y. `7 `# y1 Z1997 $18.64 $24.67
. O2 X! c! ]6 M1998 $11.91 $15.52
- `& y* W- e8 n& \, x6 R1999 $16.56 $21.12 ) I- C: }% q: K
2000 $27.39 $33.79
, z8 K& \. {! p: H" M3 R% q0 ?2001 $23.00 $27.59
A2 D/ B' q( i( N2002 $22.81 $26.94
% y+ E; {1 b! A8 u! k2003 $27.69 $31.97 ! m( G( O! T2 a/ K7 \
2004 $37.66 $42.35
( @6 C6 \8 S! @2005 $50.04 $54.01
* h* H3 w/ u- r2006 $58.30 $61.37
& v/ z2 _# T. x$ [/ n+ \2007 $64.20 $64.93
( p* @5 R! z8 U* M2008 $99.65 $99.65
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Oil sands started to take off in early 2000, correlation with increased employment rate and increased average housing price and sales (someone already provided the chart). I don’t believe that insufficient hot money will be able to manipulate the trend. Edm RE market is at lest at billions (not sure), how much hot money followed in and out? Consumer confidence and affordability are the VERY worry sigh in current Edm RE market, fiscal policy also factors in potential buyers’ expectations (agree with your analysis), hence, employment in the energy and related sectors is the key. & v- B' I O1 h8 x
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3. Importance of Oil and Gas (O&G) to Alberta’s economy.3 N2 I. B+ K& [
Alberta is export dependant economy. Direct O&G export revenue is about one third of the GDP, imaging how it affects the energy service and manufacturing sectors. What is happening in O&G? Business as usual in the upstream oil and gas, companies still keep the production in need for positive cash flow, nevertheless, they are reducing the operating cost and cutting back the exploration budget, postponing large investment in new exploration and production projects. Lots of projects cancellation is related to the downstream sector, upgrading and refining, as this sector needs huge capital injection and low IRR. But this sector normally provides many employment opportunities (eg EPC companies). Under current credit market, I don’t see any company is willing to invest. Even when the market was hot, few companies were willing to invest if the IRR is lower than 20%. Another real worry sigh, personally, I think, is the near-term (1-3 yrs) downward tread of natural gas price. Most drilling activities in the past few years (considering there were around 15,000 wells drilling in 2007, and over 22,000 in 2006!) were in fact in the unconventional gas, at the current AECO price, there is no economics or incentives. I would not ignore the natural gas price trend for your analysis. Medium to long term, I am optimistic of the gas price. BTW, oil at around current US $35 is a give-away gift.
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3 E: y& Q8 }9 |It will be more convincing if I could pull out the actual data, but I really don’t have the time. Reviewed your previous analysis and loved it (with some disagreements). I don’t have enough money to buy your full analysis, but would love to further discuss in more details. |
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楼主: 三言两语
狗仔卡
发表于 2009-1-15 12:05
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楼主
