Canadian dollar sinks below 88 cents as Saudis cut oil to $77

[tvp2003]

Notwithstanding the market/economy implications, sucks if you like going on vacation/shopping in the US.

We went to NY in October 2008, just as the economy was tanking and the dollar was plummeting (down to 0.78 IIRC). Trip ended up being a lot more expensive than we initially planned!

[edslunch]

potentially devastating effects on the economy clearly take second place to higher exchange rates at Disney

[Slava]

Originally Posted by Ducay

As expected, monstrous massacre on the markets today for Energy stocks. Normally I'd be in buy mode, but we may not have it bottom. Can hardly bare to look at my portfolio today

I wouldn't recommend getting naked to look at your portfolio, but whatever eases the pain I suppose!

[gladaki]

From one of recent article in Globe and Mail, they dont really say if its CAD$ or US$


A recent study by BMO Nesbitt Burns pegged the average cost of developing an oil-sands mine and operating it profitably at about $90 per barrel, well above the current price of crude. For example, the study said, costs at CNOOC Ltd.’s Long Lake project are well over $100 a barrel, and costs for the Suncor Energy Inc.-Total SA Fort Hills development, now under construction, are above $90.

Investors have already driven down the share prices of oil producers amid growing fears that profit margins will be squeezed and plans delayed or cancelled.

However, many well-established oil projects remain profitable at current or lower prices. The core operations of Suncor and Syncrude Canada Ltd. have costs of less than $50 a barrel. Some steam-driven oil sands projects, such as MEG Energy Corp.’s Christina Lake development and Imperial Oil Ltd.’s Cold Lake venture, have costs under $65, according to the study, giving them breathing room.

More information
http://www.theglobeandmail.com/repor...ticle21122662/

Originally Posted by burn_this_city

There shouldn't be a huge effect. I've said it before and I'll say it again. The Canadian dollar dropped and we sell oil in USD and the differential for bitumen against WTI has shrunk immensely. We're getting more now per barrel than we were same time last year.

[kevman]

Originally Posted by lorenavedon

It should send house prices up another %20 next year. Nothing can stop the insanity in the markets.

Yawn, your schtick is getting old . Take your hyperbole's back to greaterfool.ca and stop whining that you can't afford a house.

[Arya Stark]

Originally Posted by lorenavedon

It should send house prices up another %20 next year. Nothing can stop the insanity in the markets.

Up? I've had realtors tell me prices will go down with oil prices but to be fair they're not exactly experts.

Edit: NVM I must have missed the sarcasm.

[DeluxeMoustache]

Not bad news short term for equities held in USD

[Daradon]

<insert OH NOES! gif>

The funny thing is, while this is bad for the oil industry and the dollar, it's great for a lot of other Canadian exports. It's all a balance.

[Ducay]

Originally Posted by Daradon

The funny thing is, while this is bad for the oil industry and the dollar, it's great for a lot of other Canadian exports. It's all a balance.

Well it's (low CAD) good for oil industry as well because it too is an export industry. Benefits us in Alerta as much as it does softwood exporters in BC and Quebec and manufacturing across Ontario. High CAD Fx rate isn't really that good for anyone except Disneyland and online shopping. (and all other imports).


Its the low price of oil (made worse by Saudi's cut yesterday) that is bad for the oil industry. The two offset a wee bit.

[FlameOn]

Saw on TV that Goldman Sach's is projecting sub $70/barrel oil for end of 2015.

This is more fallout of Russia's foreign policy and Saudi's increasing production to punish the Russians and Americans. Sadly Canada is caught in between.

Article awhile back from Forbes about this

Riyadh tried countering the #####e bloc by helping fund jihad in Syria and it backfired. So now the Saudis have decided to punish everyone concerned, including the US. A huge gamble indeed

http://www.forbes.com/sites/melikkay...r-is-shifting/

[_Q_]

Let's invent a reason to impose sanctions on Saudi Arabia... And I'm only half joking.

[Ducay]

Originally Posted by _Q_

Let's invent a reason to impose sanctions on Saudi Arabia... And I'm only half joking.

There are already millions of reasons. What we really need is Iran to go Batsh$t insane and block the Strait of Hormuz for a while.

[Bigtime]

I was reading that the Iranian budget is based on oil being around $136, so this is hurting them in a big way too.

[FlameOn]

Originally Posted by Bigtime

I was reading that the Iranian budget is based on oil being around $136, so this is hurting them in a big way too.

Saudi's are counting on prices hurting Iran more than them. Sadly we are caught in the crossfire and if prices stay below $80 long enough we'll be in trouble with layoffs and the like.

[_Q_]

Originally Posted by Ducay

There are already millions of reasons. What we really need is Iran to go Batsh$t insane and block the Strait of Hormuz for a while.

Yeah I just think it's ludicrous that a supplier can "punish" it's biggest customers.... Customers that have very deep pockets, as well as other options.

[Slava]

Just out of curiosity, how long can the Saudis reasonably do this? Like I understand that they have huge reserves and all that, but even their reserves are finite. We're not talking about a pool that never depletes. Maybe someone in the know can give an explanation of just how much oil they have?

[burn_this_city]

If anyone is interested in Western Canada Select (bitumen) pricing year over year, this website has pricing for yesterday and one year ago. You can see the heavy oil producers are still in better shape now than this time last year.

http://www.psac.ca/firstenergy/

[burn_this_city]

Originally Posted by Slava

Just out of curiosity, how long can the Saudis reasonably do this? Like I understand that they have huge reserves and all that, but even their reserves are finite. We're not talking about a pool that never depletes. Maybe someone in the know can give an explanation of just how much oil they have?

http://en.wikipedia.org/wiki/Ghawar_Field

They have the king of oil fields. No one knows for sure, except the Saudis how much they have left.

[DFO]

Originally Posted by Slava

Just out of curiosity, how long can the Saudis reasonably do this? Like I understand that they have huge reserves and all that, but even their reserves are finite. We're not talking about a pool that never depletes. Maybe someone in the know can give an explanation of just how much oil they have?

They still have alot of oil - still on primary production no less. The big thing is the cost of production being so much lower than here in North America. They are still wildly profitable at $70.

[ExiledFlamesFan]

Originally Posted by burn_this_city

If anyone is interested in Western Canada Select (bitumen) pricing year over year, this website has pricing for yesterday and one year ago. You can see the heavy oil producers are still in better shape now than this time last year.

http://www.psac.ca/firstenergy/

The current price is almost $20 below the YTD avg. If this oil glut continues this will cut into the bottom lines of oil companies and the province.

What is the break even prices for oil sands operations? I've heard $60 or $55/barrel