The price of oil, Canada’s biggest commodity export, reached a new 2011 low Tuesday.

November oil slipped as much as $74.95 US a barrel, its lowest since September of 2010. It recovered somewhat, but still closed down $1.94 at $75.67 on the New York Mercantile Exchange, its third straight day of losses.

Crude rose to three-year highs this year, but the reasons often cited for that increase — fears of growing Middle East tensions, rising Chinese demand, bullish views from investment banks and expectations of an aggressive U.S. stimulus plan — have diminished.

Other market watchers have suggested the price gained solely because of rampant speculation on the commodities markets.

Whatever the reason, oil has dropped 32 per cent from its near-$114 per barrel peak in late April.

Sub-$80 oil could cause Canada problems

Oil below $80 may pose problems for some Canadian firms, ATB Financial said in a commentary on Sept 23.

"(For) oilsands companies with smaller … projects, $80 per barrel is probably quite close to breakeven."

"It seems unlikely that the volatility is over with," ATB said.

"Because of this, and how close oil prices are to break-even for some projects, companies and citizens of Alberta should continue to hope for the best, but prepare for the worst."

But if oil holds at those levels, it will make gasoline cheaper and lower fuel costs for shipping companies and airlines. It also could lead to lower home heating bills this winter.

Wall Street investment bank Goldman Sachs, a major player in the commodity markets, on Wednesday trimmed its forecasts for oil prices, saying energy demand growth will slow down as Europe's debt crisis raises the specter of a second recession.

Goldman, which has consistently predicted rising oil prices, lowered its estimate for average North American oil prices next year to $109 from $123.50.

In a separate report, the investment bank cut its expectations for economic growth in China as the U.S. and other countries order fewer Chinese-made products.

With files from The Associated Press