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Oil prices are below the critical benchmark. The drop in oil prices accelerated with both Brent and WTI Crude Oil continuing to slide alongside European stock markets (that has sent EUR/USD down)  The new low is $79.73, but the price is flirting with the round $80 line once again.

Lower oil prices reflect lower demand but are also a result of higher supply, especially from Saudi Arabia. And while this could tip the euro-zone into outright deflation, lower prices of oil eventually leave more money in the pockets of consumers in Europe, the US and everywhere else.

The $80 mark is considered the break even price for various governments in oil producing countries. In addition, this is considered the break even price for shale oil projects in the United States.

Brent oil is at $83.11 at the time of writing, after hitting a low of $82.90. The relevant index for Canada is Western Canada Select and not these two important oil indices, but that Canadian price is not living in a world of its own.

The Canadian dollar is pressured once again, with USD/CAD trading around 1.1350. It is still below the highs of 1.1384 seen just before the big USD sell off, but it has certainly risen from the lows well under 1.13.

For more about oil and gold, see Trading NRG.

For more on the Canadian dollar, see the C$ dollar forecast.