The oil sands industry is pumping record volumes of crude despite sinking profits and warnings of an extended stretch of weak prices. Some of the sector's largest players, including Suncor (SU-T), Imperial Oil (IMO-T) and Cenovus (CVE-T), are dumping more oil into one of the shakiest energy markets in years, defying the 50-per-cent plunge in prices.
The industry is betting that multibillion-dollar expansions will pay off over time, even as some believe the downturn is only just beginning. The uncertain outlook adds to fears that recent strength in U.S. and world oil prices may be short-lived, as economic growth in key markets stays sluggish and members of the OPEC show few signs of curbing output.
West Texas Intermediate crude for future delivery climbed $1.05 (U.S.) to $59.63 (U.S.) a barrel in Thursday trading, up 25 per cent in just one month. Suncor said Wednesday it pumped 440,400 barrels a day from its oil sands operations in the first quarter, up 11 per cent from levels in the same period a year ago. Imperial said Thursday it boosted oil sands production to 219,000 barrels a day in the first quarter, up 11 per cent from last year. |
