Oil To Make It Or Break It This Month!

[Economy 52,859]

36 minutes ago, Luc said:

The North American economies are so diverse, though, that the oil crash barely had an impact on economic growth. North America can do without, but it would be good to see countries like Russia, Saudi Arabia, Brazil and Venezuela finally go through regime change.

 

I think the US should just stay neutral in this. Almost all of their oil is consumed by themselves, which makes the impact of oil prices negligible - all money stays in the US economy. The lower prices and thus smaller oil sector is compensated by higher consumer spending in other areas and thus profits other sectors. It makes the US economy also a lot more ready for the future, as, even with high oil prices, the green sector will overtake the oil sector eventually.

But thats because the crash was really big and the energy sector shrank as much as the other sectors benefited

 

But if oil prices rise enough to go above the break-even price we can get investment in energy sector again without much pressure on other sectors

 

Were not talking about $100 oil again. Just a mid $50s range. 

 

Economists here are calling it the "oil golddilocks zone". High enough to revive energy sector but not so high as to disturb other sectors

 

because the bost in energy industry would be much larger than drop in consumer spending if it went just high enough to put oil companies in the green!

 

As for the USA specifically i dont think it matters whether they consume their own oil or not the effect is the same. If prices are too low, investment drops, jobs are lost, and they import more oil if their production drops either way.

[Economy 52,859]

3 hours ago, A Gaga Lad said:

Ontario has been on the deficit for a few consecutive years now though right?

If Alberta further declines, the whole nation's economy will still be affected

Yes. 

 

Canada is a bit unusual. Our Federal Government is in good financial state with a debt to GDP ratio of only 33%

 

But sub-soverein debt in Levels of Government such as Provinces and Munincipalities are a big problem in this Country

 

Consumer debt is also at dangerous levels

 

You could say our Federal Government is the only entity in Canada with good financial standing. But because its what most investors pay attention to, it makes Canadas finances seem more solid than they really are

 

USA is the exact opposite. They may have a lot of debt at the Federal Level and that gets lots of attention but most of their States and consumers finances are at a very healthy condition compared to Canada.