Canada gets a downgrade
The Organization for Economic Cooperation and Development (OECD) lowered its economic growth expectations for Canada in its most recent report, released March 18. The new predictions put economic growth in Canada this year at 2.2%, down from 2.6% in its November forecast. For 2016, the group now sees growth of 2.1%, down from 2.4% previously.
“Oil and commodity exporters are facing weaker growth prospects as the result of lower prices,” the OECD said. Expectations for Brazil’s outlook were also lowered. “The main class of countries for which near-term growth prospects have worsened since the November 2014 economic outlook is the commodity exporters,” the report said.
“The interim projections are significantly lower for oil-exporters Canada and Brazil, with short-term growth prospects in Brazil also being restrained by monetary and fiscal tightening and increasing political uncertainty.” According to the OECD, “Growth has already slowed in many other oil-exporting countries, and with the fall in commodity prices going well beyond oil, exporters of metals, coal and some agricultural commodities also face less favorable growth prospects this year.”
Brent falls below $53
Brent crude oil prices fell below $53 on Wednesday on oversupply concerns as industry data indicated U.S. crude stockpiles reached an all-time high last week. The price of West Texas Intermediate touched a six year low of $42.05 in early trading. Crude oil stockpiles rose by 9,622 MBO to a total of 458,508 MBO for the week ended March 13, 2015. The average analyst estimated a 4,111 MBO build.
Global oversupply concerns have been spurred by factors including U.S. output levels, some recovery in Libya’s production and the potential for a boost in Iran’s exports should Western sanctions be lifted.
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