Canadian Dollar Falls on Slowing Global Economy, Crude Oil Price, Equities

Canada’s dollar fell for the second week as stocks were pummeled and oil, the nation’s largest export, declined to the lowest level since February, signaling less demand for risky assets.

The loonie, as the currency is nicknamed, fell versus 12 of its 16 most-traded counterparts this week on speculation slowing economic growth will weigh on demand for raw materials. Growth concern was tempered yesterday when reports showed Canadian jobs grew for a fourth straight month in July and employment increased in the U.S., the nation’s largest trading partner, more than forecast. Demand for Canadian government securities will be tested when the Bank of Canada auctions three-year debt on Aug. 10.

“Concern over the health of the U.S. economy is probably a very negative translation to the Canadian economy,” said Gregory Salvaggio, senior vice president of capital markets in Washington at the currency trader Tempus Consulting Inc. “On top of that, significant slippage in commodity prices all contribute to downward pressure on the loonie.

The Canadian currency fell 2.8 percent to 98.20 cents per U.S. dollar in Toronto from 95.52 on July 29. One Canadian dollar buys $1.0183. It touched 94.07 cents on July 26, the strongest since November 2007.

Gas prices could drop 35 cents

It might take a few days, but gasoline prices soon should fall in light of the recent decline in oil prices.

How does a drop of 35 cents per gallon sound? That's what some national forecasters are anticipating over the next month.

Oil prices have fallen about $10 per barrel in about a week, driven downward by a sluggish global economy, said Rose White, a spokeswoman for AAA Nebraska.

Oil for September delivery closed Friday at $86.88 on the New York Mercantile Exchange.

In the last 10 days, Benchmark West Texas Intermediate crude has declined $12.71 a barrel.

Prices tumbled as a series of weak economic data rolled in.

The United States said the economy grew only 1.3 percent in the second quarter, while manufacturing reports pointed to weaker activity in the country and in China.

The U.S. debt-ceiling debate ended with plans to cut spending by $2.4 trillion over the next decade, while Europe continues to struggle with enormous debt.

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Extraction of petroleum

The extraction of petroleum is the process by which usable petroleum is extracted and removed from the earth

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Nowadays, the geologists use seismic surveys to search for geological structures that may form oil reservoirs. The "classic" method includes making underground explosion nearby and observing the seismic response that provides information about the geological structures under the ground [2]. However, "passive" methods that extract information from naturally-occurring seismic waves are also known ^[1].

Other instruments such as gravimeters and magnetometers are also sometimes used in the search for petroleum. When extracting crude oil, it normally starts by drilling wells into the underground reservoir. When an oil well has been tapped, a geologist (known on the rig as the "mudlogger") will note its presence. Historically, in the USA, some oil fields existed where the oil rose naturally to the surface, but most of these fields have long since been used up, except certain places in Alaska. Often many wells (called multilateral wells) are drilled into the same reservoir, to ensure that the extraction rate will be economically viable. Also, some wells (secondary wells) may be used to pump water, steam, acids or various gas mixtures into the reservoir to raise or maintain the reservoir pressure, and so maintain an economic extraction rate.

Drilling

Main article: Oil well

The oil well is created by drilling a hole into the earth with an oil rig. A steel pipe (casing) is placed in the hole, to provide structural integrity to the newly drilled wellbore. Holes are then made in the base of the well to enable oil to pass into the bore. Finally a collection of valves called a "Christmas Tree" is fitted to the top, the valves regulating pressures and controlling flows.

Oil extraction and recovery

Primary recovery