How much do exchange rates come into play when these Canadian producers figure out their price points? At $41/barrel I can see why a producer in Texas would be hurting, but the Canadian dollar has declined considerably over the last year and is now trading at $1.32 CDN to $1.00 US. Even though oil is priced on the spot market in U.S. dollars, most of the production costs are paid in the local currency ... which means the real issue is whether Canadian producers are making or losing money at a price of $52.80 CDN per barrel. Isn’t this the case?
see post 7
Canadian oil isn’t worth as much as US oil. It’s closer to a solid than a liquid, and it requires more money and work to make it into something useful, so it usually sells at a discount to the WTI benchmark. (Brent has been selling at a premium to WTI, but in recent months the margin has narrowed as pipeline capacity in the US has improved).