Total (French Oil) Leaving The Canadian Oil Sands -- Costs $90/Bbl -- Sells For $85/Bbl

Updates

Later, 7:16 p.m. central time: how coincidental. In the original post below, The WSJ noted that "western Canadian oil fetches about $85." I was reading the most recent issue of Bloomberg Businessweek, p. 16: "As rail activity has ramped up and demand for Alberta's heavy crude has increased, so has its price, jumping from about $50 a barrel in November to more than $85." 
 

Original Post

 

There are a lot of story lines in this story. The Wall Street Journal is reporting:

French oil major Total is getting out of the sandbox. The toys are just too expensive.

The company is putting its Joslyn oil-sands project in Canada on indefinite hold. BMO Capital Markets estimates the project's cost at north of $90 a barrel.

Right now, Western Canadian oil fetches about $85.

Total's move is part of a broader shift. Some 450,000 barrels a day of potential output has been deferred this year, according to Sanford C. Bernstein.

Western oil majors are doing what the stock market wants. Having seen returns on capital slump, investors want more payouts and less spending.

And then this:

But Big Oil's retreat also comes when all the excitement, with stock-price multiples to match, is around smaller competitors pioneering shale development.

Their output, particularly in North America, has helped keep oil prices stable despite geopolitical shocks elsewhere. The question is whether the smaller exploration and production companies can keep doing this.

If so, the majors' curtailed production may not boost oil prices as much as could be expected. They might simply lose market share to more innovative minnows instead.