Crashing crude weighs heavily on lowly Loonie, global markets

VANCOUVER (NEWS 1130) – The price of oil dropped below US$28 a barrel this morning, which means a unit of crude now costs less than the barrel it comes in and that is again driving down global markets.

And there are growing concerns about the health of the world’s economy if the nosedive continues overseas and if oil keeps sliding.

Asian markets fell almost four per cent today, which is a huge plunge, while the Nikkei in Japan hit 20 per cent below its recent high last June. European markets also went down and a big part of that is because of the continued drop in the price of oil.

There has been some finger pointing at oil-producing nations like Saudi Arabia as accusations surface of market manipulation to hurt its rival Iran. However, Saudi Foreign Minster Adel al-Jubeir says it’s simply basic economics.

“It’s about supply and demand. You cannot manipulate the market and be able to do so consistently and so if you let market forces play out then the equilibrium is set naturally.”

“And it reminds me of the conspiracy theories we have in the Middle East. In the Middle East the conspiracy theories have to do with what the great powers are doing and in the West the conspiracy theories have to do with what the oil powers are doing,” he adds.

If oil prices continue to fall, there are fears the world economy could take a hit, one that is somewhat already being felt across Canada as it drags down the oil-patch economy and the Loonie.

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