The article “Why the oil price is falling” (E.L., 2014) attributed the 40% oil price drop to four reasons: less demand, constant output from Iraq and Libya, more global supply caused by the US importing less and the fact that the Saudis and their Gulf allies chose not to reduce oil production. According to the Canadian Government, Canada is the world’s fourth largest oil producer and exporter (Natural resources Canada, 2020). It contributes to 5% of global production and 7% of global exports. In 2018, it exported 3.7MMb/d and only imported 0.6MMb/d. Its exports are 6 times its imports. Since Canada is a major oil-exporting country like those in the Middle East, the most likely effect of a large oil price decrease would be negative to the Canadian economy since the positive effect would be partially negated by the negative effect of reduced profits from exports.
Since the reason of the price drop is exogenous and Canada is a price taker in this case, Canada is not able to change the price by changing domestic supply or demand. With cheaper price, it could import more oil with the same amount of money as raw materials for manufacturing, automobile or other general use. Oil demand would rise. With cheaper production inputs, manufacturing companies could boost production and make more profits, which is good for the Canadian economy. Consumers could also benefit from cheaper gas. Given that most Canadians own cars, the accumulative positive effects of price drop could be huge. Increased oil demand would also stimulate the economy. However, on the other hand, this would be bad news for Canadian oil drilling companies that are involved in expensive oil extractions projects. Also, the financial industry might be hurt given many investors would expect the oil price to rise and bet on oil futures. The negative effect is expected to be more severe than the positive effects given that the “riskiest and most vulnerable bits of the oil industry” is present in Canada as oil production industry is a major one in Canada.
As a result, the Canadian central bank should resort to certain monetary policies to weaken the negative effects on the large oil drilling companies. It could slightly decrease short-term interest rate, or, if the economy is hurt, it could change money supply by decreasing the required reserve ratio.
Reference:
1. E.L. (2014). Why the oil price is falling. The Economist.
2. Natural Resources Canada. (2020). Crude oil facts. Government of Canada. https://www.nrcan.gc.ca/science-data/data-analysis/energy-data-analysis/energy-facts/crude-oil-facts/20064
Three Squirrels Will Enter the American Market in Winter 2017
给大家推荐一篇优秀的代写Essay范文-- Three Squirrels Will Enter the American Market in Winter 2017。
Recently, an exciting news spread to people and spread wildly among people. That is, the famous Chinese snack brand "Three Squirrels" will enter the American market in the winter of 2017. This means that most Americans will have the opportunity to taste and taste the famous and delicious snacks produced by Chinese companies.
Three Squirrels is a famous snack brand in China. Three Squirrels Co., Ltd. was established in 2012. It is the first company in China to position a pure Internet food brand. It is also China’s largest supplier of food and electricity, and its sales have increased significantly. Obviously, there is no reason to question the company’s capabilities.
The snacks produced by this company are very delicious. There are various snacks, such as pork jerky, beef jerky, macadamia nuts, pistachios, cashews, sweet potatoes, etc. All these snacks are produced through unique processing technology to meet people’s needs. Therefore, the brand is very successful in the production of snacks. In fact, I believe everyone will be interested in these snacks and try to taste them. I also firmly believe that these snacks will not disappoint us because of their deliciousness!
After the three squirrels enter the U.S. market, it may have a valuable opportunity to obtain more satisfactory results and then achieve long-term development. No one can question that the United States is a place where snacks are popular, and most Americans have high consumption levels. In addition, the "Three Squirrels" itself is very unique. If the company can produce products suitable for locals, it will have more chances of success.