Pengrowth Energy Corp., which has lost more than 40 percent of its value this year, and Paramount Resources Ltd. fell along with other Canadian oil producers as crude dropped below $80 a barrel for a third day on concerns a sluggish global economy will cut fossil-fuel demand.
Pengrowth, based in Calgary, fell 5.3 percent to C$6.20 at the close in Toronto, the lowest since Mar. 11, 2009. Paramount declined 6.5 percent to C$22.30, the lowest since Nov. 17, 2010.
“If you believe that the world economy is shrinking, which most people probably believe, then it’s not a stretch to imagine that the rate of growth and oil demand is decreasing,” Eric Nuttall who manages C$90 million for the energy fund at Sprott Inc. in Toronto, said in an interview today. “Supply this year is likely surpassing demand.”
Oil for August delivery declined 0.7 percent to settle at $79.21 a barrel on the New York Mercantile Exchange after George Soros warned that a failure by European Union leaders to stem the region’s debt crisis may spell the demise of the euro. Futures are down 20 percent this year.
Ithaca Energy Inc. fell 15 percent to C$1.56 and Blackpearl Resources Inc. dropped 8.9 percent to C$2.87, the lowest since July 6, 2010. Baytex Energy Corp. slipped 2 percent to C$39.69, the lowest since Nov. 5, 2010.