Many analysts predicted that crude oil prices could decline further from $30 per barrel — prices which has not been seen since for over a decade. Canadian oil sand producers are feeling the pain from the continues decline of crude oil prices, with prices there even lower than current crude prices.

Standard Chartered Bank has the most bearish oil outlook among the major banks. The British Bank forecasts the possibility that crude oil prices could crash to as low as $10—which is now happening in Canada. The last time crude oil prices reached as low as $10 a barrel was during the height of the financial crisis in Asia in 1998.

Andy Hall must be a very lonely bull.

Bitumen price drops at $8.50 in Canada

According to Bloomberg, the oil sands producers in Canada are suffering the most because the price of bitumen plummeted to as low as $8.35 on Tuesday, down from $80 less than two years ago.

Bitumen is a semi-solid hydrocarbon product produced by removing the lighter fraction such as liquid petroleum gas, petrol, and diesel from crude oil during the refining process.

During a conference in Calgary, Martin King, a commodity analyst at FirstEnergy Capital emphasized that producers are losing money at current prices. He explained that oil producers could stop their pain as spending for bitumen extraction is upfront, and the production will continue to increase.

Bitumen is a victim of the global oversupply of petroleum, which dropped the U.S. benchmark prices to $20s from more than $100 over the past 18 months. It is cheaper than other types of crude oil because producers are diluting it with more expensive and lighter petroleum, and it is transported from Alberta to U.S. refineries.

Oil

Canada needs more oil pipeline

According to him, Canada needs more pipeline capacity to transport bitumen out of Alberta by 2019. TransCanada is challenging the United States government over its rejection of the Keystone XL pipeline project.

The Canadian energy infrastructure company filed a lawsuit under the North American Free Trade Agreement (NAFTA) and a Constitutional litigation against the United States government. TransCanada is seeking to recover $15 billion in damages under its NAFTA claim and to obtain a declaration that the permit denial has no legal merit under its Constitutional litigation.

Energy companies have fighting environmentalists over the past decade to get approval for the pipeline. The Keystone XL pipeline would allow energy companies blend more of the tar-like petroleum and transport it to other parts of the world.

“It’s another one of those instances where the market makes these hot policy topics sort of irrelevant. It’s moved from the top of the docket to the bottom right now,” said John Auers, executive vice president at Turner Mason & Co. “