A Calgary-based investment commodity expert feels the provincial and federal governments are being too optimistic when it comes to budgeting oil prices.
Last week, the Federal Liberals announced they’re basing its 2017-18 budget on the price of selling at $54 a barrel, while the provincial NDP is building its budget on the price of oil selling at $55 a barrel.
This is a stark difference from the Russian government, who set its draft budget at $40 a barrel on Friday.
Founder and CIO of Auspice Capital Advisors Tim Pickering tells Mix News from a budgetary perspective, our government’s approach is aggressive and reckless.
“Any government that put this out I’d make the same statement. They’re betting hard on recovery and the only way I can see this sort of aggressive viewpoint is coupled with an aggressive hedging program that kicks in if prices rise.”
Pickering says while he thinks oil will reach over $50 a barrel by the end of the year, he feels both the feds and province should be building a budget around $42 a barrel.
“We can all have our views but basing a government budget that is so far detached from what the reality is, is really concerning. I hope they’re right, but that’s not how you run a business or province.”
Meanwhile, Pickering says the $30 million the Liberal’s allocated for Alberta’s oil and gas industry isn’t enough considering how much the industry provides to the country.
“This industry is for the benefit of all Canadian’s and that’s what Canadian’s lose sight of,” said Pickering. “Fort McMurray and the people of Fort McMurray have committed so much to this industry, $30 million is a pittance for what people have sacrificed.”