— This is the script of CNBC's news report for China's CCTV on October 9, Thursday.
Oil prices are ticking higher in Asian trade, after US crude settled at its lowest level in 18 months.
But with nymex still under $90 a barrel, and both the IMF and World Bank trimming their global growth forecasts, the question is, just how low can oil go.
CNBC's Jackie DeAngelis is working that story.
Oil prices have gotten crushed - good news for consumers because retail gas prices are dropping but bad news for global producers who are reaching crtitical break even points. Now suppliers around the world are forced to decide, are these price fluctuations temporary or is it time to cut supply? Some are saying, not so fast. At least in the canadian oil sands. A representative from Cenovus says there's no need to panic.
[Drew Zieglgansberger, Cenovus Energy Senior VP of Operations] "If you look at the overall world's supply cost, right now there's reports that it's in the $70 range. And we are in the high $30s to low $40 supply cost range for Cenovus in our two main oil sands facilities areas. So we have a lot of value to still generate, we have a lot of running room."
Still, according to reports, the average cost to produce out of the oil sands is $89 to $96 a barrel. Here in the US, it's between $70 and $77. With WTI at well under $90, some producers are feeling the pinch already. And traders saying there's more pain to come. WTI could fall to $85 in the next couple of days. If that level is breached, the slide could continue. But suppliers aren't making any moves just yet. In Canada, the expectations is that output will continue to ramp, but with realization that recent growth will begin to trail off.
[Mayor Melissa Blake, Regional Municipality of Wood Buffalo] "There's a point where that's actually gonna level up from reaching whatever maximum daily output could be in the economic circumstances, taken into consideration all of the factors responsible for development."
What to watch for? Well OPEC is meeting next month, the cartel might make a move. Here in the US, we've been talking about oil exports. Perhaps the conversation heats up. For cnbc, I'm Jackie Deangelis.
The latest fed minutes show the central bank is no rush to raise rates, pushing US stocks into the money. The stronger dollar though raising some concerns, hurting the greenback.
And according to Mark Keenan from Societe Generale, it appears that low interest rates are set to be around for a little bit.. and it's expected to support not just oil, but commodities at large.
I'm Qian Chen, reporting from CNBC's Asian headquarters.