Canada’s oil and gas sector is already suffering through a period of weak growth, according to the Canadian Association of Oilwell Drilling Contractors’ annual activity forecast released a week ago. So hearing the news of the broad-based decline in Canada’s main stock index was like a knock-out punch.
By mid-morning on Tuesday, the S&P/TSX composite index was down 49.87 points or 0.02 percent at 16,975.24. The energy sector subindex dropped 0.7 percent, the most of all the sectors due to a continuing decline of crude oil prices that are dependent on the questionable progress being made on the U.S.-China trade deal, according to Reuters.
In New York at mid-morning, the Dow Jones industrial average was down 62.51 points at 27,973.71. The S&P 500 index was down 2.28 points at 3,119.75, while the Nasdaq composite was up 12.29 points at 8,562.23, reports CTV News Canada.
Looking at the bigger picture, the Canadian energy sector has lost huge amounts of capital after having $30 billion divested in the last three years. This is contrary to the news that global demand for oil will continue to grow, according to CBC Canada.
The international Energy Agency’s World Energy Outlook 2019 report, issued this week said that global demand will grow by about one million barrels a day over the next five years, with demand for oil flattening out by the 1930s.
