Low demand for oil will impact Canada’s recovery. Over the last several months OPEC has been making cuts to production in an attempt to stabilize the cost of oil. Unfortunately, they are fighting an uphill battle as the second wave of Coronavirus takes hold around the world. This is curbing demand for oil and the desire for $60 a barrel seems a long way off. At the end of last week the barrel of oil decreased to $38.79 (West Texas oil decreased to $36.63).
A reminder that oil decreased to $20 in April and it is not inconceivable that it will visit this territory again. Continuing instability in the middle east has not provided much support and it is further counterbalanced by political uncertainty in the US, in itself causing additional consternation. Some analysts argue that a Biden victory next month has not been priced in yet, so there is a glimmer of hope.
Regardless, Canada has been on a path of diversification in the past couple fo years. These efforts need to be accelerated and green energy and technology are two areas where we have opportunity to do this.