Oil price loss seen as gain for consumers: ‘What is saved at the pumps will be spent at malls’

Financial Post | Business

OTTAWA — The federal government isn’t fretting, just yet, over the drain on Canada’s finances caused by a seemingly endless weakening in oil prices, a situation aggravated by OPEC’s decision Thursday not to cut its production levels.

But there will be some obvious benefits to four-year-low oil prices — cheaper gasoline at the pumps, for one, and a possible knock-on buying effect for some consumer-dependent sectors of the economy.

“What is saved at the pumps will be spent at the malls,” said Avery Shenfeld, chief economist at CIBC World Markets.

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Crude prices experienced the biggest single-day drop since May 2011 after the Organization of the Petroleum Exporting Countries kept its production levels on hold — a move widely telegraphed by the cartel — despite the current glut of oil and reduced global demand.

Finance Minister Joe Oliver, who was previously Canada’s natural resources minister, played down…

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