Alberta blames oil market for budget woes

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EDMONTON, Alberta, Nov. 29 (UPI) -- The provincial government in Alberta expects a budget deficit of more than $2 billion in part because of crude oil market issues, a finance minister said.

Alberta Finance Minister Doug Horner said the provincial government expects a budget deficit for the year of $2.3 billion-$3 billion. He said market issues for crude oil from his province were part the reason for the deficit.

"Right now the difference between the world price for a barrel of oil and what our producers can get for their bitumen is about $28," he was quoted by the Calgary Herald as saying. "Multiply that by about 2.5 million barrels a day and the math adds up very quickly."

The U.S. Energy Department notes that nearly 99 percent of the oil produced in Canada is designated for the U.S. market. Canada aims to reach Asian markets by building pipelines from Alberta to western ports.

Provincial district leader Danielle Smith said the budget deficit was a "train wreck."

"This is a government that always relies on oil revenues to bail them out of their over-spending and this time it is not working for them," she was quoted as saying.

Alberta said it expected oil prices to average around $92 per barrel by the end of the year. Oil prices Wednesday stayed below $90 per barrel following a bleak global economic assessment by the Organization for Economic Cooperation and Development.