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OPEC could make Canadian oil price crisis even worse





The oil price crisis in Western Canada could deepen next week depending on whether Saudi Arabia, Russia and other countries decide to cut oil production and — if so — by how much.

Oil prices in Alberta are the lowest they have been in more than a decade, selling for about $17 US per barrel for Western Canada Select, the Alberta benchmark for heavy oil. Around the globe, prices have also suffered with West Texas Intermediate, the North American benchmark, falling about 33 per cent in the last two months.

What OPEC decides could give prices a boost or send them spiralling down further.

The oil industry’s rough ride in October and November has created an immense amount of interest in the OPEC meeting in Vienna on Dec. 6.

“It has a huge impact,” says Jackie Forrest, analyst with the ARC Energy Research Institute in Calgary, about the possible fallout for Canadian oil prices. 

“If OPEC doesn’t make a cut and if global prices begin to fall, that will just push our prices down further, putting more pressure on Canadian producers. It’s very consequential to the Canadian industry.”    

The oilpatch was enjoying climbing prices throughout the summer as supply and demand were in balance, but surprising many experts, production kept on climbing — mainly in the U.S. — and storage tanks are filling up. 

The meeting is ‘very consequential to the Canadian industry,’ says Jackie Forrest of the ARC Energy Research Institute. (Kyle Bakx/CBC)

Other factors have also caused a drop in oil prices such as the U.S. loosening its restrictions on Iran and concerns about limited oil demand growth in 2019.

Oil prices in Western Canada are especially low because of a backlog of oil and limited spare export space in pipelines and on railways.

OPEC meetings are tough to predict and experts don’t seem to have a sense which direction the cartel will go next week. In the past, OPEC countries have announced production cuts, but global oil prices still tumbled.

“There is always downside risk with these meetings because the market has some sort of expectation. Even if there is a cut made, if it is not what the market was expecting, then sometimes its negative in terms of where prices move,” says Forrest.

OPEC countries may decide not to cut production for several reasons because many countries can’t afford to turn down the taps. 

“The question is, who will do the cutting? That’s always the question,” says Derek Brower, a London-based analyst with the RS Energy Group. 

“The pool of people who can actually cut is pretty small. That’s why the credibility of this deal really hinges on what Russia and Saudi Arabia do.”

Brower says he doesn’t get the feeling there is a sense of urgency to make production cuts from OPEC leaders. Prices just haven’t fallen far enough.

“When it comes to cuts for OPEC, as the saying goes, it’s a bit like a bag of tea,” he says. “It only really works when it’s in hot water. The water is getting pretty warm right now in terms of the oil price.”

At this point, Brower estimates that OPEC and non-OPEC countries will agree to cut production between 500,000 and one million barrels of oil per day, but that the market will view this as underwhelming.

Some experts are optimistic the cartel will do enough to give oil prices a boost. 

Analysts with BMO Capital Markets expect the cartel will cut production to raise prices moderately.

WTI prices are currently about $51 dollars per barrel, but according to a recent research note, BMO analysts now project WTI to “rise from its current level to an average of $62 US per barrel in 2019.”


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Real Estate

7 Tips For First-Time Home Buyers In Calgary





Buying a house for the first time can be overwhelming to say the least. If you’re wondering what neighbourhood to go with, what you can afford, or even how to just get started on the process, let us take some stress off your hands! We’ve teamed up with Hopewell Residential to give you 7 tips to ensure the home you end up with is everything you dreamed of.

Hopewell Residential is a five-time Developer of the Year award winner, so their expertise is second-to-none in Calgary and beyond. Who better to learn home-buying tips from than the homebuilders themselves?

Create a checklist of needs & wants

This is a biggie. When you’re buying your very first home, you’ll want to weigh your needs vs. your wants. Ensuring you have what you love in your first home is a big, big deal.

What should you do? Easy. Set up a list of needs and a list of wants, but be pretty strict with yourself, and make sure you take your lifestyle into consideration. With the increase in remote work over the past year, it’s important to keep in mind that a home office or flex room might just be the key to maximizing at home happiness. Especially if you’re thinking you might be expanding your family later on, spare rooms and extra space is key (but more on that later!).

Or for instance, you might need a home in an area with a high walkability score, but you want to be close to certain amenities. Set yourself up with the right level of compromise and the number of homes that actually fit your ‘perfect’ idea will skyrocket.

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Real Estate

‘Don’t give up’: Ottawa Valley realtors share statistics, tips for homebuyers in ‘extreme’ sellers market





The real estate market in the Ottawa Valley can be summed up this way: people from far and wide are in a buying frenzy, but there’s hardly anything to buy at the “store,” and the limited inventory is overpriced.

This “stampede” — as one realtor described it — will affect rural towns as residents grapple with finding affordable housing and agonize over their inability to purchase homes in their price range.

“We are seeing a lack of inventory in all price ranges,” said Laura Keller, a real estate agent from Carleton Place.

Helen Vincent, a Renfrew realtor, said she’s never seen a market like this in her 36 years of practice. “We postpone offers for four to five days in order to get all the buyers,” she said.

Multiple offers — between seven and 10 — became the norm, with cash offers and no conditions, as buyers faced bidding wars. “In Ottawa, they have up to 50 (offers),” she added.

“It’s very stressful. You’re going to get nine (people) ticked off, and one happy. So many people are disappointed,” Vincent said.

Terry Stavenow, an Arnprior realtor for 40 years, said that “the pent-up need took over with inventory going low. It made a stampede on everything that was available.“

“Brand new housing — it’s very much gone. Several building developers are rushing to get inventory. They usually don’t do construction in the winter months,” said Stavenow.

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Real Estate

10 Tips For First-Time Home Buyers





Buying a home for the first time is exciting and a commitment to the future. It’s often challenging, too, and the process requires a lot of steps, many of which can be tricky to navigate as a first-time home buyer.

What are some things you should keep in mind as a first-time home buyer?

First-Time Home Buyer Tips

Here are 10 tips to keep in mind as you begin your journey toward homeownership.

1. Have Your Finances in Order

It’s wise to begin saving as early as possible once you’ve made the decision to purchase a house. You’ll need to consider the down payment, closing costs (which often range from 2% to 5% of the down payment), as well as move-in expenses.

You also need to understand the other costs of homeownership, such as mortgage insurance. property taxes, utilities, homeowner’s insurance, and more.

2. How Much Can You Afford?

Knowing how much you can realistically afford in a home is another important financial consideration. Look for the home of your dreams that fits your budget.

One way to avoid future financial stress is to set a price range for your home that fits your budget, and then staying within that range. Going through the preapproval process will help you understand what price range is realistic for your budget.

3. Make Sure Your Credit is Good

Another thing to keep in mind as a first-time home buyer is your credit score because it determines whether you qualify for a mortgage and affects the interest rate that lenders offer. 

You can check your credit score from the three credit bureaus – Experian, Equifax, and TransUnion.

This is another good reason for getting preapproved before you start your search. Learn more about the preapproval process and your credit score.

4. Choose The Right Real Estate Agent

A good real estate agent guides you through the process every step of the way. He or she will help you find a home that fits your needs, help you through the financial processes, and help ease any first-time buyer anxiety you may have.

Interview several agents and request references.

5. Research Mortgage Options

A variety of mortgages are available, including conventional mortgages – which are guaranteed by the government – FHA loans, USDA loans, and VA loans (for veterans).

You’ll also have options regarding the mortgage term. A 30-year fixed-rate mortgage is popular among many homebuyers and has an interest rate that doesn’t change over the course of the loan. A 15-year loan usually has a lower interest rate but monthly payments are larger.

6. Talk to Multiple Lenders

It’s worth your time to talk to several lenders and banks before you accept a mortgage offer. The more you shop around, the better deal you’re liable to get – and it may save you thousands of dollars.

7. Get Preapproved First

Getting a mortgage preapproval (in the form of a letter) before you begin hunting for homes is something else to put on your checklist. A lender’s preapproval letter states exactly how much loan money you can get.

Learn more about the preapproval process and how preapproval provides you with a significant competitive advantage in our article How Preapproval Gives You Home Buying Power.

8. Pick the Right House and Neighborhood

Make sure to weigh the pros and cons of the different types of homes based on your budget, lifestyle, etc. Would a condominium or townhome fit your needs better than a house? What type of neighborhood appeals to you?

9. List Your Needs and Must-Haves

The home you purchase should have as many of the features you prefer as possible. List your needs in order of priority; some things may be non-negotiable to you personally.

10. Hire an Inspector

Hiring an inspector is another crucial step in the home buying process. An inspector will tell you about existing or potential problems with the home, and also what’s in good order. You can learn more about home inspections and how to find a home inspector through the American Society of Home Inspectors website.

Buying a home for the first time is a challenge, but it’s one you can handle with the right planning and preparation.

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