After several weeks of declining crude oil prices, there was good news to start today’s trading session. WTI has risen above the $30 mark to sit currently at $32.25. Brent crude also is up 4.09% and is trading at $29.79.
The rise in crude prices continues after a strong finish to Thursday trading. Today’s continued rally comes after weekly U.S. government inventory and production data.
Hopes for easier monetary policy from Europe fuelled a recovery in European and U.S. stock markets yesterday, and it would appear those same hopes are helping fuel today’s rallies as well.
Incremental price gains however, will not solve the dire problems facing the Western Canadian energy industry and the Canadian economy at large.
As was reported yesterday, The Bank of Canada see’s the current price environment as very concerning for the Canadian economy. “The drop in oil and other commodity prices constitutes a significant setback for the Canadian economy, and has set in motion a protracted adjustment process,” Bank of Canada Governor Stephen Poloz said.
Professional investors have also expressed bleak outlooks for the energy sector, and Canadian economy.
“The resource-driven Canadian economy will continue to bear the burden of a low oil price, as significant reductions in capital expenditure in the energy sector have yet to be entirely offset by other sectors,” said James Dutkiewicz, chief investment strategist at Sentry Investments in Toronto.