Quotes from TD Economics:- Canada’s oil patch has been a key engine of economic growth since the recession. The roughly 25% drop in oil prices since July has understandably raised concerns about the industry’s prospects and the impact on the Canadian economy. TD Economics has lowered its crude oil price forecasts for 2015 as supply growth has outstripped demand recently, and it will take markets time to adjust.- Looking ahead, even under TD Economics’ lower oil price forecast, Canada’s crude oil basket in Canadian dollar terms remains higher in 2015-2016 than it was during the 2011-2013 period. Moreover, a lower oil price forecast is not expected to crimp near-term production in Canada’s oil patch. TD Economics expects Canada is on track to expand oil output 5-6% annually in barrel terms over the next couple of years.- However, recent price declines have turned the spotlight back on some of the longer-term challenges facing the industry. Headwinds to new investment in the sector include uncertainty about wider market access, volatile price differentials, heightened public scrutiny of projects, and cost inflation. These challenges have likely already contributed to more modest capital spending growth for non-conventional oil and gas in 2014.
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