Clip from Danielle Park's blog.
Canadian oil under $10, how low can it go?
Hitting a low of $8.35 a barrel yesterday (down from $80 2 years ago), Canadian oil producers are losing money at current prices. Yet so far, they are continuing to pump at record levels nonetheless. The spending to extract bitumen is front-loaded and so sunk costs encourage producers to increase output as prices fall. Today highly indebted and desperate for cash flow, most don’t see a choice. See: Crude at $10 already a reality
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