Nfld. & Labrador

'It's not time to worry,' Paul Davis on declining oil prices

Premier Paul Davis says the Newfoundland and Labrador government is not concerned at this point in time even though there has been a sharp decline in global oil prices,
Premier Paul Davis maintains that despite a sharp decline in global oil prices, his government is closely monitoring the situation. (CBC)

Premier Paul Davis says the Newfoundland and Labrador government is not concerned at this point in time even though there has been a continuing sharp decline in global oil prices, as stockpiles grow and demand drops,

Davis told CBC News he is aware of what's happening in the marketplace.

"it's not time to worry," he said.

"We watch oil prices very, very carefully and I've had discussions with the minister of finance on this, in particular. And they were strong for earlier part of this year. They've weakened right now, but they have a tendency to fluctuate, so I think it's a little bit early yet to reach any conclusions of what the outcome and impacts are going to be." 

The price of Brent crude — the type of North Sea oil on which Newfoundland and Labrador bases its financial forecasts — was trading mid-day Thursday at $90.96 US a barrel. 

In the March budget, then-finance minister Charlene Johnson said the province was forecasting oil prices to average $105 US, an exchange rate of 91.25 cents on the American dollar, and production of 86.2 million barrels of oil. 

Last week, economist Wade Locke said every dollar below the forecast price of oil represents between $20-and-$25 million less for the provincial coffers.

Oil revenues account for roughly one-third of the province's revenues.

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