Sinking oil prices: Winners and losers

Already record-low oil prices could sink even deeperin 2016, some economists are predicting,putting Canada's slow-moving economyin more jeopardy. Still,somesectors are reaping the benefits of the sharp decline in energy costs.

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The benchmark West Texas intermediate crudedipped briefly below $30 US a barrel on Tuesday,hitting 12-year lows. If theU.S. dollar continues to rocket skyward, oilcould drop as low as$20 US, according to analysts.

While thispaintsa gloomy picture for the Canadian economy,an oil slump can bring big savings to some.

"Anyone or any business that on net consumes oil is getting a price cut right now," Leslie Preston, senior economist at TD Bank, told CBC News.

"The challenge for Canada is we're a big oil producer,so the spillover effects from the slowdown in what's a key sector in Canada do weighagainst these positives."

Here's a look at the winners and losers.

Winners

Airlines, air travellers

Reductions in the cost of jet fuel saved the world's airlines$89billion USin 2015, according to theInternational Air Transport Association a trend that seems likely to continue. Canada's two major airlines Air Canada and WestJet both reported increased trafficand profitin 2015.

• Westjet profit soars 19% as jet fuel costs plummet
• Air Canada profit soars on lower jet fuel costs

Some of those savings are being passed along to travellers.

"We have seen this both anecdotally with lots of different seat sales and promotions offered lately and empirically,with our monthly domestic airfare survey declining yet again in November," Ben Cherniavsky, an airline industry analyst for Raymond James Ltd. in Vancouver, wrote in a note to clients, explaining the increased airline businessin December.

In the U.S., airfare-predicting app Hopper is forecasting a three-yearlow in the cost of plane tickets this month.

Drivers, autoindustry

Low oil prices translate into savings at the pump. Gas costsless than $1 per litre across most of Canada right now,according to GasBuddy.com

That's also good for theauto industry, which set a recordfor new vehicle sales in 2015 in Canada, largely on the strength of renewed demand forSUVs, pickup trucks and minivans.

Oil-consuming countries

"Globally, economies that are net consumers of oil are also expected to benefit," Preston said, citing Japan, the eurozone and eventhe U.S.

"Even though [the U.S.]hashad an impact from reduced investments in its shale sector, it is still a net importer of oil, so it's a modest positive for the United States," Preston said.

That's good forCanada,too, she noted,because the U.S. is our biggest trading partner.

Losers

Oil-producing countries

"The economic fallout clearly has a direct impact on the many countries that rely upon oil and gas as the major contributor for the well-being of their economy," wroteSteve Higgins, CEOof theNorth East of England Process Industry Cluster, inThe Chemical Engineer.

That meansRussia andVenezuela, Colombia, Ecuador andSaudi Arabia are all in trouble.

Canadian governments

Italso means Canada is in trouble, especially our energy-dependent provinces.

"In terms of winners and losers,governmentcoffers in Canada certainly are a loser," Preston said.

Alberta's NDP government warned Tuesdaythat it could cut spending in the upcoming spring budget and delay election campaign promises ascrude oil prices continue to slide.

In November,Saskatchewan reported a $262-milliondeficit.Newfoundland and Labrador expectsto rack up a $1.96-billion deficit this fiscal year.

Oil companies

While Canadian oil companies are bracing the slumpbetter than their overseas counterparts, thanks to an offset from the weak loonie, the effects are still crushing.

• Mass layoffs in Alberta nearly double past two years combined
• Alberta job losses will be tackled by Trudeau government
• Suicide rate in Alberta climbs 30% in wake of mass oilpatch layoffs

"The cutbacks in terms of spending by [energy]companies have had a really big effect on Canada's economy as a whole,and we're expecting that these cutbacks aren't done that the energy sector is going to continue to cut back on how much it's spending,whichincludes further layoffs," Prestonsaid."If these low prices persist,companies might look at potentially taking productionoffline."

It's complicated

Manufacturing

Cheaper oil means Canadian companies save money onlike electricity, transportation and heating.Paired with thelowerloonie, the oil slump can be beneficial toexporters because it makes our goods look cheaper overseas.

At the same time, manufacturersthat rely on the oil industry will struggle.

"The energy sector does buythings from other sectors of the economy, be it pipes or wires, and some of this stuff is manufactured elsewhere in Canada," Preston said. "So while manufacturers are getting a break in terms oftheir energy cost, they may also be seeing decliningdemand for what they produce."

The environment

Asked what effects slumping oil has on the environment, one energy expert told CBC News: "Good and bad."

"Timesof low oil priceslike this are actually good for the environment on the supplyside,"MarkJaccard,professor in the energy and materials research group at B.C.'s SimonFraserUniversity, said. "We have less incentive to build pipelines and dig moreoilsandsout of the Earth."

But on the demand side,cheap oil means more people are driving gas guzzlers,booking flights andcranking up the heat, while investment ingreen technology dwindles.

"If we care about the environment,we're trying to reduce our own consumption,"Jaccard said."Those things are more difficult when the price of oil is low."