Oil Price and Credit Crunch Puts Big Canadian Oil Sands Projects on Hold

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"I think everybody knew that the wheels were going to come off to some degree, but the collapse of the credit markets has just accelerated all of this," Dundee Securities analyst Menno Hulshof said. "I don't think anybody in a million years thought oil prices were going to come off as hard as they did..."

Companies developing Canada's oil sands, one of the world's largest deposits of crude oil, said on Thursday they aim to cut spending on multibillion-dollar projects in response to tumbling oil prices and the financial meltdown...

The cuts are the latest to hit Canada's energy sector, where fortunes have soured quickly as oil demand has dwindled, more than halving prices in a three-month span to current levels below $70 a barrel. "I think everybody knew that the wheels were going to come off to some degree, but the collapse of the credit markets has just accelerated all of this," Dundee Securities analyst Menno Hulshof said.

"I don't think that anybody in a million years thought oil prices were going to come off as hard as they did and that the larger players were going to have to make these difficult decisions."

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