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increased to 1,092 during the week ended June 16, marking the 22nd week in a row that the rig count has risen. In Canada, meanwhile, Baker Hughes reported an increase to 159 rigs — 2.3 times the number at the same time last year. Meanwhile, Libya and Nigeria — two OPEC countries exempt from the production cuts because they’re grappling with de facto Climbing Chalk|Canada civil wars — have got their act together enough to ramp up production. So has Iraq. As a result, overall OPEC output in May — the same month the cartel agreed to renew its caps — rose by more than 330,000 barrels a day. Why does the Bank of Canada suddenly seem in such a hurry to hike rates? And then, finally, there’s the question of what OPEC does next spring when its latest production agreement — which isn’t working to establish a price floor in the low $50s — ends next year. Will it renew? Or will it open the taps to try to gain back market share, savaging prices once again? So let’s put it this way: the Canadian economy might have put one oil shock behind it, but that doesn’t mean another one isn’t on the way. If that happens, the central bank would have 50 basis points less room to cut than it did in early 2015. If it cut anyway, then it would only be throwing gasoline (we have lots of it, anyway) on already overheated regional housing markets in Vancouver and Toronto. You also might want to wonder how much another 25 bps off the overnight rate would do to spur business investment, especially in the oil patch, if crude sinks again below US$30 a barrel. Right now, the Bank of Canada’s biggest friend might be the weak loonie, which has been sinking this week right along with oil prices. That, at least, should encourage the “broadening” of our economy away from energy, as the Bank has been hoping for several years now.

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