As bad as 1998, 1985 or even 1890s? Peter Tertzakian takes the fiscal pulse of Canada’s oil crash

, Investment

From shrinking cash flow to declining production, Canada’s exceptionally weak fiscal pulse is a case study on how oil will recover.

Economists and analysts have been trying to find historical comparisons to the lengthy oil price downturn that began 21 months ago. As bad as 1998? 1985? Or even the 1890s?

Regardless, the dual impact of oil and natural gas prices falling by more than 50 per cent since late 2014 has led to a severe contraction in the Canadian oil and gas industry. In an update to our report “The Fiscal Pulse of Canada’s Oil and Gas Industry,” we examine the ongoing impact of the downturn on capital flows, production levels and field activity since our last review, one year ago. Through our model called the “Fiscal Pulse,” we assess the financial health of Canada Oil and Gas Limited (COGL) – a fictitious company that represents a financial consolidation of all upstream oil and gas companies operating across the country.

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