Courtesy of www.greencarreports.com
North American oil prices are finally lower, however it is the Canadian economy that is suffering from this price decrease. By next spring oil prices are expected to go down to as much as $70 per barrel compared to around $100 which is what they were priced at previously. Although drivers are relieved, according to Capital Economics, the recent decline in oil prices will generate a loss of 2.5 billion annually for Canadian oil producers.
However it isn’t all bad for Canada, since the loonie is currently struggling and oil is dealt in US dollars, Canadian companies are getting more US dollars for their oil which is reducing the money lost. Also, in the long run I believe that this may be beneficial for the Canadian economy because it could increase the non oil imports that Canada receives. Since Canadian’s are also saving money with lower gas prices, I believe that over time it will help the Canadian Dollar grow because as time goes on so will the value of the money of Canadian’s. With that being said if the market decides to raise gas prices to make up for lost profit, I believe that it could lead to economic unrest in Canada which could eventually cause Canadian’s to find alternatives for oil and gas.