Indeed, such a shift – or other investors’ (eg hedge funds) anticipation of it – is commonly cited as a “special factor” explaining what appear to be excessively low levels of global longterm interest rates.
Although most of Canada’s exports move by pipeline and see relatively modest price discounts, the newest barrels are discounted the most, and this is suppressing capacity investment in the sector. Looking beyond oil, we have seen particular weakness in base metals. A generic index of base metals prices has fallen 13 per cent since the start of the year.