Article content

The Organization of Petroleum Exporting Countries’ statement that “weak oil demand is here to stay” has serious implications for Canada and its economy.

Weak demand translates into low oil prices, which means low cost producers will thrive, and high cost producers will wither and die, taking their financial backers down along the way. Are Canada’s banks going to continue supporting high cost oilsands projects?

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or Green energy inversion accelerating, displacing hydrocarbons Back to video

Alberta’s economy is already in a shambles thanks to the oil price collapse, and its fortunes are weighing on those of the country, as evidenced by the 36,000 lost jobs reported in July, bringing the national unemployment rate to 6.9 per cent.

Examining the causes of lower oil prices, we can safely conclude that a technologically driven reduction in costs, and improved recoverability from existing reservoirs, has resulted in excess production and inventory. To counter that, OPEC, led by Saudi Arabia, continues to pump oil at a furious pace in an effort to drive out higher cost producers through a price war of attrition.