Home / Financial crisis / Tax hikes, carbon caps and now $37 crude: For Canada’s oilpatch, the bad news just keeps coming
oil.jpg

Tax hikes, carbon caps and now $37 crude: For Canada’s oilpatch, the bad news just keeps coming

With the latest oil price collapse to below $38, more companies are finding it impossible to make money in one of the world's most expensive places to drill.

For Canada’s oil industry, the bad news won’t stop.

With OPEC’s decision on Friday to keep pumping oil in the face of a glut and prices for the commodity falling to their lowest level since 2009, Canadian producers are once again faced with the now-familiar problem of how to make fossil fuel extraction in one of the world’s most expensive places to drill profitable. The latest price collapse to less than US$40 a barrel already means losses for some companies.

“Netbacks can be zero or even negative in this price environment,” said Justin Bouchard, an analyst at Desjardins Securities Inc. in Calgary, referring to returns on a barrel of crude after most costs are factored in. “Budgets are as close to the bone as possible and companies are cutting as deeply as they can without shrinking production.”

Related

Check Also

gold-prices.jpg

Be ready to buy gold equities: J.P. Morgan

Most analysts are cautious on gold these days, especially since the market anticipates a rate …

Leave a Reply

Your email address will not be published. Required fields are marked *