February 8, 2016
Oil is continuing to hover around horribly low $30.00 levels. The massacre in prices we have seen in this market since it began to plunge has been truly historic, crippling countries that rely heavily on this commodity.
Two countries that we have written about extensively, Russia and Canada, have both felt the pain that a crashing oil market can cause, and are experiencing unemployment and inflation rise.
In addition to this, both countries’ currencies have witnessed massive setbacks, which only adds to the pain, given the large amount of imports they require to function.
Today we focus on Canada, which is once again feeling the pinch of continued low oil prices. The province of Alberta has just announced that they shed a staggering 10,000 jobs in the month of January alone.
This comes on the heels of 2015, which saw a loss of 20,000 jobs, pushing unemployment to 7.4% in the province. What is most alarming, but not unexpected, is the acceleration of job loss we are witnessing.
Sadly, as I first forecast, workers in many industries are being affected, not just those who work directly in the oil field. Agriculture, manufacturing, construction, culture, accommodation, food services, and business services are all feeling the pinch as the rippling effect of lost wages and revenue spills out into the rest of the economy.
Unfortunately, Alberta is not going to be the last province to feel the pain. Already, people are spending less in the province and knuckling down. Once unemployment and savings evaporate, then this story is going to spread throughout Canada.
In fact, the rest of Canada lost an additional 5,700 jobs in January, missing analysts’ expectations and disappointing economists. The oil markets continue to stagnate and have caused a loss of 40,000 jobs since they began their crash in mid-2014, falling 70% from their highest point.
Unfortunately for those countries, including Canada, that rely so heavily on oil to generate revenue, the short-term future is bleak. With oil rigs and platforms shutting down on an almost daily basis, it will be years before this industry can recover. Let's hope it happens sooner, rather than later.