Plummeting oil prices are taking a toll on Canada’s energy exports and threatening to leave little in the economy’s tank for 2015.
Shipments of crude oil and bitumen dropped 9.9 percent to C$6.9 billion ($5.8 billion) in November, the biggest decline in almost three years, the federal statistics agency said Wednesday from Ottawa. The trade report is among early signs this may be a tough year for an economy that’s suffered least among developed nations from the 2008 financial crisis, as energy-export woes add to concerns the nation’s housing market is in jeopardy.
Canada, the Group of Seven’s biggest crude exporter, “has nothing going for it,” Paul Ashworth, chief North America economist with Capital Economics Ltd., said by telephone from Toronto. “You have a collapse in oil prices which is going to hit that industry. You have a housing market that could fall over at any point.”
Benchmark crude prices dropped below $50 a barrel this week for the first time since 2009, prompting Alberta energy companies to scale back investment and economists to question their 2015 growth forecasts. David Wolf, co-manager of Fidelity Canadian Asset Allocation Fund and a former Bank of Canada adviser, said the commodity-price slump has substantially increased odds the central bank will cut interest rates rather than raise them.
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