One Canadian energy strategist said he thinks weak demand is behind the plummeting price of oil.

As crude dropped below $US70 per barrel on Wednesday, Michael Tran, managing director of Global Energy Strategy at RBC Capital Markets, told BNN Bloomberg he doesn’t see the trend being driven by recession fears, but rather weaker demand as people spend less on travel.

“There’s certainly demand-side weakness that’s playing out in the market,” he said in a television interview. “We’re in for a bit of a soft patch here.”

Tran said he expects it will take a significant shock to the markets to get out of the current oil rout, as cautious investors sit on the sidelines.

The Organization of Petroleum Exporting Countries and allies (OPEC+) delivered a shock in April when it announced its members would cut one million barrels per day for the rest of the year – but Tran said he thinks it will take increasing demand to steady the oil market.

“Demand really needs to lead us out of this mess, but until then I think the market is going to be quite sloppy,” he said.

Tran noted that he is bullish on Western Canada Select (WCS) crude oil, with a Mexican refinery and the Trans Mountain Pipeline extension due to come online soon, opening opportunities for Canadian oil producers.