Falling Demand, Surplus Supply Drive Oil Prices to Two-Year Low
Falling demand and surplus supply drove world oil prices down to $91 per barrel earlier this month, the lowest since 2012 and 20% below the 2014 high of $115, the EIA reported October 10.
In addition to new supplies from Libya coming online over the summer and fall, the EIA cited higher production and lower imports in the U.S., as well as falling sweet crude demand in Europe and Asia, with industrial production in China growing at its slowest rate since 2008.
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The Canadian Broadcasting Corporation described an even lower price of US$84.90 per barrel as “a jarring wake-up for the three oil-rich provinces of Alberta, Saskatchewan, and Newfoundland and Labrador,” noting that lower prices would cost those provinces billions in revenue. Economist David Madani said Canada as a whole could lose $11 billion in export revenue this year, about 0.6 of its GDP.