Lower oil prices could mean lower output

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Oil prices continue to plummet in North America and many experts say the cost of crude will soon drop to historic lows.

Marvin Ryder of the DeGroote School of Business spoke to CHCH News about how falling oil prices could affect Canada’s economy.

“As we approach $40 a barrel, things like the shale oil in the States and the oil sands in Canada just isn’t economically viable to pull out of the ground. We’ve already cancellations of some exploration, some exploratory wells new facilities that were supposed to be built. Cancellations are really much of a hold…. we’re going to wait a bit longer.”

“We saw today that U.S. Steel is closing a pipe plant to provide pipes to all of this. At this price it’s probably not economical. The bigger question is, ‘are we going to see layoffs in Alberta or in the midwest?”

Ryder says this could be OPEC’s strategy to drive the price low enough to cut back the supply of oil from countries like Canada and the U.S.

Additional video: Full interview by Annette Hamm on News Now Midday:

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