Because it would cost them more to shutdown in the long run.
I can understand that reasoning in the short term.
Two questions for you.
1. At what point do they break even (CPB)
2. Are we going back to the $90 to $100 dollar CPB anytime soon?
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?
“Because it would cost them more to shutdown in the long run.”
It’s my understanding that shutting down these systems isn’t nearly as damaging to the fields as it is to shut down an oil well suddenly, and skilled people can’t be fired/hired at the drop of a hat. It also involves cash flow. Gotta keep that flowing.