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Canada is in close contact with the United States about the oil price crash and its effect on the industry, Canada's Deputy Prime Minister and Minister of Intergovernmental Affairs Chrystia Freeland told media.
"Let me just say that this is a very fast-moving situation," Freeland said as quoted by CBC News. "The current situation in the global energy markets is something that we're very concerned about."
The oil price shock has left the Canadian oil industry reeling, with the local crude benchmark sinking below $10 per barrel, casting a shadow over the industry's survival chances yet again. What's more, the crisis could threaten the whole Canadian economy.
"With the economy already on precarious footing, the added shocks of the recent rail blockade protests, the arrival of COVID-19, and a collapse in oil prices have brought the country to the brink of recession," the Conference Board of Canada said in its Canadian Outlook Summary Spring 2020 this week. It added, "The Canadian economy is reeling as the impacts of the COVID-19 pandemic ravage consumer and business spending and cratering oil prices have put a halt to the expected rebound in the energy sector."
Oil prices got a brief respite yesterday after U.S. President Donald Trump tweeted that he "hoped and expected" that Saudi Arabia and Russia would cut a combined 10 million bpd of oil production.
"Just spoke to my friend MBS (Crown Prince) of Saudi Arabia, who spoke with President Putin of Russia, & I expect & hope that they will be cutting back approximately 10 Million Barrels, and maybe substantially more which, if it happens, will be GREAT for the oil & gas industry!" Trump said in the tweet that sent WTI up to more than $27 a barrel.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.