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The Hibernia oil field located approximately 315 km east-southeast of St. John’s, Newfoundland.

The global price war for oil is intensifying, dealing more pain to energy companies as top OPEC producer Saudi Arabia seeks to regain market share lost to North American rivals.

France's Total SA on Tuesday became the latest energy major to dial back planned spending this year. The oil giant shaved as much as $3-billion (U.S.) from its 2015 budget compared to a year ago, with spending reductions planned in the U.K. North Sea and in Canada's oil sands, according to a Financial Times report.

Meanwhile, oil-field service company Baker Hughes Inc. cut 7,000 jobs, or 11 per cent of its staff, just days after rival Schlumberger Ltd. announced it was axing 9,000 jobs from its global workforce.

The cuts are fresh evidence that oil's deep slide – prices have now fallen more than 60 per cent since June last year – is taking a toll on growth plans of some of the world's largest energy firms.

Oil prices skidded again Tuesday as the International Monetary Fund cut its forecast for global growth, a sign of the darkening economic mood beyond the United States. U.S. benchmark West Texas intermediate (WTI) dropped 4.7 per cent to $46.39 a barrel. Brent, the global benchmark, fell 1.8 per cent to $47.99 a barrel.

Some analysts said the slide may extend longer than is widely expected as members of the Organization of the Petroleum Exporting Countries refuse to cede market share on the U.S. Gulf Coast to rivals that include Canadian oil sands producers.

"I'd be really surprised if they reversed course so quickly because it needs time to do the job," Mike Wittner, managing director and head of global commodities at Société Générale, said Tuesday in Calgary.

"From their perspective the job is killing off growth in non-OPEC supply, and ground zero for that happens to be in North America."

U.S. crude may come under further pressure as international producers look to gain ground in the U.S. market, Amrita Sen, energy economist at London-based Energy Aspect, said Tuesday in a note.

Foreign producers are increasingly targeting the North American market, offering discounts to refiners on the East Coast and the Gulf Coast while growing domestic supply pours into the storage hub at Cushing, Okla., where WTI is priced.

Ms. Sen said greater volumes of crude from West Africa and the former Soviet Union are being shipped to the United States and Canada, while the Saudis and Iraqis have cut their prices in the American market and both OPEC members are looking to increase exports to the U.S. Gulf Coast.

At the same time, a wave of heavy Canadian crude is set to hit the region via Enbridge Inc.'s newly started Flanagan South and Seaway pipeline systems, adding to supply pressures in the refining hub.

Analysts say oil sands producers are particularly exposed to weaker energy prices, owing to high operating costs and the long distance between the northern Alberta deposits and consuming markets.

Oil's decline has prompted deep spending cuts in the sector and led companies to postpone investments in new projects. On Tuesday, a prominent global energy analyst said Alberta's industry is vulnerable to further cutbacks and that "some high-cost projects may never be exploited."

"It will be a big sweat before this sorts itself out," Edward Morse, managing director and global head of commodities at Citi Research, said in Calgary.

With a file from Shawn McCarthy in Ottawa

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Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:00pm EDT.

SymbolName% changeLast
B-N
Barnes Group
-0.88%37.15
ENB-N
Enbridge Inc
+0.53%36.18
ENB-T
Enbridge Inc
+0.29%48.95
HI-N
Hillenbrand Inc
+0.86%50.29
SLB-N
Schlumberger N.V.
-0.16%54.81
T-N
AT&T Inc
+0.28%17.6
T-T
Telus Corp
+0.37%21.67
TBB-N
AT&T Inc 5.350% Global Notes Due 2066
-2.65%23.5
TU-N
Telus Corp
+0.63%16.01

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