How The Crude Oil Prices Affect The Economic Growth Of Canadian Industrial Production
The crude oil price has been very volatile during the past several years due to the overproduction and an increasing inventory for major economies. It is very hard for the main crude oil producers to reach an agreement to cut global production all together, so the price reached a historical low level during 2015-2016 (Breul 2016), and to this day the oil price is still at a low level compared with decades ago.
Since crude oil is a very important part for many economies around the world, it would be very interesting to study how the crude oil price can affect the economic growth of Canadian industrial production, especially during the recent volatile crude oil market. Industrial production is directly related with oil price, because oil is an integral part of the production process.
There are two major types of economies that could be heavily impacted by the movement in the crude oil market, the exporters and the importers. The exporters are the countries that relies on the production of crude oil for economic growth, and a low oil price is harmful to them because they are now earning less income. The major oil exporters include Saudi Arabia, Russia, Iraq, United Arab Emirates and Canada (EIA 2016). Another group is the importers, who reply on the foreign oil for industrial production and can be negatively affected by an increasing oil price. The major importers are United States, Japan and China (EIA 2016). These are the countries with a large…