Canada’s recent uncontrollable wildfires will cost the country’s oil industry $760 million (C$985 million, £528 million) and destroyed the equivalent of 1.2 million barrels of oil a day, according to new research.
The analysis by the Conference Board of Canada (CBC) suggests that wildfire destroyed 16.8 million barrels of oil across its 14-day rampage.
Huge wildfires ripped through Alberta Canada, earlier in the month, destroying huge swathes of forest and land and forcing tens of thousands of people to flee. The area that was hit is a big oil producing region and the price of crude spiked as the wildfires spread.
The analysis suggests that the fires have wiped out roughly C$985 million in real GDP, although the CBC says this is minimal to Canada’s overall GDP and will be partly mitigated by rebuilding efforts in the area.
Pedro Antunes, CBC’s Deputy Chief Economist, says in a statement:
The true cost of this tragedy is the effect on people’s lives and livelihoods, the loss of homes and personal items. The lost assets will be rebuilt — generating additional economic activity. However, this does not suggest in any way that Albertans or Canadians are better off. In fact, the funds put towards replacing lost capital will leave the provincial and federal governments with more debt, and the insurance industry with the challenge of absorbing what will most likely prove to be the costliest natural disaster in Canadian history.
Brent oil is down 0.39% at $49.09 per barrel on Wednesday morning, while its US equivalent, West Texas Intermediate, is down 0.17% at $48.23 per barrel.
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