Ability of oilsands players to weather storm a question of timing: economist
The Canadian Press
October 10, 2008 - 12:44 a.m.
CALGARY - The ability of oilsands players to weather the recent economic tempest will in large part depend on timing, an economist says.
On Friday crude oil prices shrivelled to US$80 - break-even territory for many high-cost oilsands projects.
Derek Burleton of TD Economics says companies that started their projects a few years back will be in better shape, since their plans were based on crude prices not all that different from today's.
However, more recent projects will have been designed around higher commodity prices, meaning they're more vulnerable to being delayed or shelved.
Burleton says it also depends on how long oil is expected to languish at its current levels, and he thinks crude will rebound in the next year or two as market panic dissipates.
The silver lining will be for fuel consumers, as lower crude eventually filter down into the price at the pumps.
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