Recently, the Paris-base IEA forecast that the oil price will stay below $80 until 2020. As reported, oil price was down more than 50% in last year and reached its lowest price of the decades in May, 2014. This downturn is because of the oversupply of oil in the world market by the members of OPEC. Besides, the negative impact of lower oil price will sequentially affect Canadian economy over the next five years.
Firstly, the oil sands in Alberta needs high oil prices to extract oil, due to the low price, it may be a big obstacle for Alberta to keep produce, or the low price may force the oil company to reduce their production of oil. These definitely reduce the Canadian export of oil.
Secondly, the low crude price increases the rate of unemployment. It was reported that some drilling contractors have had to cut off their employees through the past 6 months. Moreover, it is predicted that there will be more cut in the next five years.
Last but not least, Petroleum industry is a key part of Canadian industry, one of the biggest impact is the low oil price decline the aggregate income of Canada. The direct impact of this downturn reduce the purchasing power for Canadian. The most important thing learn from this downturn is the Canadian government should build a more stable and diversified economy, because the price of oil brings too much uncertainties.
http://www.cbc.ca/news/business/oilpatch-q3-earnings-1.3275400
http://oilprice.com/Energy/Oil-Prices/High-Debt-And-Low-Oil-Prices-Create-Perfect-Storm-For-Canadian-Economy.html
http://www.cbc.ca/news/business/oil-price-forecast-to-stay-below-80-until-2020-iea-says-1.3312059
