Price drop has yet to cut Canadian oil output

CALGARY, Alberta (Reuters) – Canadian energy companies have yet to start shutting down large volumes of oil production due to low prices, but the market meltdown has started to fuel some nervousness about the prospect.

So far, a 66 percent drop in crude prices since July, coupled with the credit crunch and still-high construction costs, has prompted numerous oil sands developers to defer and rethink their plans for new projects and expansions.

But at $50 a barrel, the taps on existing Canadian production of conventional light and heavy oil and oil sands-derived crude — a key energy source for the United States — have not been seen to be closing.

“You’ve got to think that it’s starting to get a little bit closer to the bone,” FirstEnergy Capital Corp analyst William Lacey said.

“They’re still making money, albeit it’s a lot less than what they were.”

Reuters