Think oil in the $20s is bad? Some analysts have warned of $20 a barrel; Standard Chartered has said fund-selling may not relent until it reaches $10.
But in Canada, they'd be happy to sell it for $10.Canadian oil sands producers are feeling pain as bitumen - the thick, sticky substance at the centre of the heated debate over TransCanada Corp's Keystone XL pipeline - hit a low of $8.35 on Tuesday, down from as much as $80 less than two years ago. Producers are all losing money at current prices, First Energy Capital's Martin King said Tuesday at a conference in Calgary.
Which doesn't mean they'll stop. Since most of the spending for bitumen extraction comes upfront, and thus is a sunk cost, production will continue and grow. Canada will need more pipeline capacity to transport bitumen out of Alberta by 2019, King said.
Bitumen is another victim of a global glut of petroleum, which has sunk US benchmark prices into the $20s from more than $100 only 18 months ago. It's cheaper than most other types of crude, because it has to be diluted with more-expensive lighter petroleum, and then transported thousands of miles from Alberta to refineries in the US.
