Oil continued to slide on Wednesday after the head of the International Energy Agency predicted a decline in crude prices and weaker oil investment in 2016.
Oil is at its lowest level since early 2009, with the West Texas Intermediate contract falling below $37 US a barrel today before recovering to $37.24 at the close.
Fatih Birol, executive director of the Paris-based IEA, said oil prices could fall in 2016.
"When we look at 2016, I don't see many reasons why we can see upward pressure on the prices… Demand is weaker and we may well see Iran come back [to the market] and there will be a lot of oil," Birol said from the sidelines of the COP21 climate conference in Paris
The IEA monitors demand and supply of energy worldwide. He said falling oil prices could affect many oil-consuming countries' resolve to switch away from fossil fuels.
Oil investment down 20%
Birol said that IEA estimates indicated that investment in the oil industry fell by more by 20 per cent in 2015 – the steepest decline in history. A further decline is seen in 2016.
The Canadian oilpatch has been hoping for higher prices, because much Canadian production is not economically viable at current price levels.
OPEC's decision to leave output at current levels makes it less likely that the worldwide oversupply of oil will ease.
The Canadian dollar came down with the price of crude, falling to below 73.50 cents US in the morning before bouncing higher to 73.72.
A CIBC foreign exchange report Tuesday predicted the loonie would fall to 70 cents US by the end of the first quarter of 2016, amid Canada's uneven recovery in the face of low oil prices.
Markets were down in Asia and Europe overnight after most commodities continued to fall in price because of fresh signs that the Chinese economy is slowing. Chinese exports fell by 6.5 per cent last month.
The TSX recovered from its lowest level in two years yesterday and was up 15 points to 12,924 after energy stocks recovered.
The Dow Jones industrial average lost 75 points, or 0.4 per cent, to 12,937.
The Standard & Poor's 500 index gave up 16 points, or 0.8 per cent, to 2,047. The Nasdaq composite dropped 75 points, or 1.5 per cent, to 5,022 after a big selloff of Microsoft, Apple and Yahoo.