The daily drum beat of tumbling oil prices continued Friday, with U.S. benchmark oil contracts slipping to just over $59 (U.S.) a barrel. That’s the lowest level in more than five years.
The last time oil prices were below $60, Canada and the world were mired in a global recession.
MORE: Stocks, consumer confidence, housing gripped by crashing oil prices
On Friday, The IEA, or International Energy Agency, cut its outlook for how much oil world economies will need next year, adding more downward pressure on crude prices.
Two days earlier, OPEC, which includes Saudi Arabia and other Middle Eastern oil powers, said it expects to sell less oil next year than previously forecast, as well.
“The relentless slide in oil prices continues this morning,” Robert Kavcic, a senior economist at Bank of Montreal said.
Loonie falls
As a net exporter of oil, lower crude prices are seen as negative for the Canadian economy, which is driving down the loonie as investors swap it for currencies climbing in value, like the U.S. dollar.
The loonie fell to a fresh five and-a-half year low on Friday to 86.46 cents U.S.
For consumers, pump prices are likely to fall further still in the coming weeks, experts say. And in the near term, that’s providing a cushion for the economy.
MORE: Gas prices plummet toward $1 across the country
Fresh figures from the United States on Thursday showed retail spending rising higher than expected in the world’s largest market place thanks in large part to savings consumers are seeing at the gas station. American shoppers spent 5.1 per cent more last month than they did last November when gas prices were meaningfully higher.
“The sharp decline in oil and gasoline prices couldn’t have come at a better time, putting a little more discretionary income in the pockets of spenders for the holiday shopping season,” Jim Baird, an investment expert at Plante Moran Financial Advisors, said in a note.
WATCH: The price of oil dropped to its lowest in five years on Thursday, below US $60 for a barrel of crude. That brought the value of the Canadian dollar below US $0.87. Reid Feist reports on the impact on Canada’s oil companies.
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