A deadly combination of Covid-19 teamed with plunging Oil price is killing the world economy with the world’s financial superpowers now grappling to tackle the situation. Canada is reportedly meddling to mend its distorted finances as the North American state relies heavily on the Energy business which is now toppled with Oil price slip and Covid-19 which forcefully closes its trade across the globe.
“The dual challenge could not be more critical”, said the Canadian senator from Alberta, Jason Kenney when referring to the situation. Saudi Arabia and Russia had flooded the market with Crude which caused a dramatic drop in oil prices. As a matter of fact, the American companies are now in an unchartered trade collapse which makes its oil production cost greater than the market price.
Flooding of the oil market will directly impact North American companies who simply cannot compete with Saudi Arabia. As well as this, Canadian and American companies have gone into significant debt in order to expand their operations—relying on the fact that oil prices will remain at $50 to $60. Now, oil prices are in the $40 range, possibly sinking as low as $30—making the production of oil in North American unprofitable.
Italy, South Korea, and Australia had quarantined many cities placing a billion-dollar trade deficit-the impact of which will soon resonate the global market .”The virus risks giving a further blow to a global economy that was already weakened by trade and political tensions”, said OECD chief economist Laurence Boon. In the US the virus after claiming the lives of two in Florida had started its new frontier attack in New York and Rhode island There have now been more than 88,000 confirmed cases of coronavirus worldwide, with infections on every continent except Antarctica.
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