ANALYSIS: Nosediving Oil Prices—What’s Facing Canada’s Economy, Energy Sector

Oil was the top-performing asset in the third quarter but now it’s on one of its sharpest declines in recent years. It’s the kind of trend that can spell trouble for the Canadian economy and yet another hit for the country’s energy sector. The price of the U.S. crude benchmark West Texas Intermediate (WTI) dipped below US$69 per barrel on Dec. 12 for the first time since late June, marking a decline of 26 percent from its Sept. 27 level of over US$93. Brent, the international oil benchmark, is on a seven-week losing streak. These shorter-term declines aren’t quite in the same ballpark of late 2014 to early 2016—when the price of WTI fell by roughly 70 percent—or the very sudden and massive shock due to the COVID-19 pandemic in early 2020....