WOW!!!  $8.35 per bbls... and that was on Tuesday.. before Friday's selloff..

That is not a misprint..  ( http://oilprice.com/Energy/Oil-Prices/Forget-20-Oil-Prices-At-8-Per-Barrel-In-Canada.html )

WTI has declined to $30 per barrel, the lowest level in more than 12 years. But heavy oil producers in Canada would love to have $30 oil.

The price for a barrel of bitumen, the tar-like oil sands that comes from Alberta, fell to just over $8 per barrel this week. That is not a typo. Bitumen traded at $8.35 per barrel on Tuesday.

In fact, Amazon.com sells oil drums – just the barrel, not the oil – for $78, almost ten times the cost of the actual bitumen. To be fair, that drum holds 55 gallons instead of the industry-usual 42 gallons. But even a 30-gallon barrel – again, an empty barrel – costs 7 times more than the oil sands that would go in it. 

Single-digit oil prices for oil sands is not just a problem, it is an existential crisis. That is because heavy oil is some of the costliest stuff around. Bitumen production is way more expensive than oil from shale.

Heavy oil producers are now losing money on every single barrel that they sell, even from facilities that are already up and running. Forget the fixed costs of development; just the operating costs of keeping a project online are significantly higher than the revenue that an oil sands producer would earn from selling their bitumen. 

Consequently, it is shut-in time for some producers. Leaving aside the massive cutbacks in spending and the future oil production that will not be realized, Canada could start posting some serious production declines from existing sources. Simply shutting down an operation probably makes more sense than selling oil at a loss.

But some companies might stay online and lose money because shutting down carries its own trouble and costs. Shutting down can actually damage a reservoir, leaving a site with permanently lower output. As a result, production shut ins could actually be “extremely limited,” Martin King of Calgary-based First Energy Capital recently told an industry conference. 

Surely it can't go below zero...???

Flip side.. looks like China is buying US Crude..

( http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/china-buys-first-us-crude-cargo-since-end-of-export-ban-source/article28209694/ )

China’s state-run oil refiner Sinopec Corp has purchased its first ever batch of U.S. crude oil for export, a source told Reuters on Thursday, a landmark transaction after the ending of a four-decade ban on domestic exports.

The cargo, due to be loaded from a Gulf Coast port in March, may mark the start of a sustained flow of U.S. oil to China, the world’s second-largest buyer, which is eager to diversify its energy sources. Unipec, its trading arm, also has the advantage of leased oil storage tanks in the Caribbean, which could allow it to blend U.S. shale with cheap, heavy Latin American crudes for a bespoke mix ideally suited to its plants back home.

While the first unfettered exports of domestic crude have already set sail to Europe, those cargoes are generally seen as one-off shipments by companies eager to make a point after fighting for two years to end the ban. Based on current U.S. and world prices, the cargoes do not appear profitable, traders said.

With China, the calculations are less straightforward. As the world’s second-biggest oil refiner, Sinopec buys more crude oil than almost any other company, and has worked to improve its supply security by seeking out diverse sources.

“U.S. crude oil exports are positive news for the global market, and make it possible for Asia-Pacific refiners to diversify their supply if the crude is economically competitive,” a company source said. “Our upcoming storage capacity in the Caribbean is well-suited to this development.” 

edit add: s'pose we could fill one of those cargo ship holds with ethanol.. ???  Headed in the right direction...

Interesting times..  Maybe it's time to start thinking about locking some product in...???