06:58 AM EDT, 05/08/2025 (MT Newswires) -- On growth, lower oil prices are a mild positive for most of the mature economies, and could potentially act as a nice offset to the trade war with the United States, said Bank of Montreal (BMO).

However, the impact is a bit more nuanced for the U.S.

economy, now that the U.S. is the largest oil producer in the world, noted the bank.

For Canada, oil prices have long been considered a moderate net negative for growth, due to the nation's status as a heavy oil exporter, pointed out BMO. Over the past 20

years, a $20/barrel drop in oil has been associated with a gap in real gross domestic product growth between Canada and the U.S. of up to 1.5 percentage points.

However, the bank suspects that the relative hit will be lighter this time because:

-- Investment in the Canadian oilsands sector is now mostly maintenance, and there is much less torque to prices.

-- This year's move is still relatively small, and the impact of oil price changes may not be linear.

-- The relative boost to U.S. growth is lighter due to the

increased importance of oil production in that economy versus past cycles.