Alberta Surplus Rises Amid High Oil Prices

The Alberta government has reported a $2 billion surplus for the current budget year, exceeding initial projections. This uptick in income is largely attributed to increased earnings from government enterprises, particularly the Sturgeon Refinery, which is expected to make a profit due to rising energy prices.

University of Calgary economist Trevor Tombe expressed surprise at the relatively modest surplus, anticipating a figure closer to $6 billion given current market conditions. However, he noted that there is 'a lot of uncertainty' surrounding future economic prospects.

The province has revised its oil price forecast upwards to $73.50 per barrel for the current budget year, but this estimate appears conservative given that benchmark U.S. oil prices have averaged around $88 a barrel through the first six months of the year. Energy analysts expect WTI oil prices to average $95 a barrel for the remainder of 2023 and beyond.

On a more positive note, Alberta's economy is expected to grow by 2.5% this year, with key sectors such as agriculture and manufacturing experiencing increased exports and investment. Capital spending in the oil and gas sector is forecast to rise by $1.4 billion, or 4.4%, this year.