After four oil forecasters delivered their expert opinions about where the price of oil is headed this year, the moderator of the conference in Calgary responded, "interesting and somewhat depressing." 

That was the general feeling in a crowd of about 100 people at the Conference Board of Canada event on Tuesday.

The consensus is that oil prices will average about $40 US a barrel in 2016. While the forecasters spoke at the conference, oil kept sliding in the markets, trading below $30 US for the first time since 2003. 

'Prices could go lower. There is nothing stopping them from going lower.' – Michael Wittner, Société Générale

"It's possible that oil prices will go to $20 for a week or two, even $10," said Glen Hodgson, the Conference Board's chief economist.

Investment in the Canadian oilpatch dropped by 40 per cent and Alberta's economy shrank by one per cent last year, according to the Conference Board.

"We're getting clobbered," said Hodgson.

Bankruptcy threat

The notion that oil could sink into the $20 range has been put forward before by Ed Morse, the global head of commodities for Citi Research. He reiterated that possibility Tuesday, arguing there is too much supply and no place to put it.

"To cut supply, you probably need a much lower price for a period of time," said Morse. "That's probably where we are going."

The global supply and demand should begin to balance out again at the end of 2016, said Morse, but it will be an ugly time for the oil sector until that happens.

"This is a world where not only companies can go bankrupt, but countries can go bankrupt," he said. 

Citi Research's Ed Morse on when oil prices will hit the bottom1:10

Cheapest oil in the world

The situation in Western Canada is worse than elsewhere in North America because the oil is generally sold at a lower price owing to the limited export pipeline capacity.

Western Canada Select, a type of heavy oil, is selling for less than $20 US a barrel.

"We are already looking at the cheapest, lowest crude prices anywhere in the world right here in our own backyard, so things are looking somewhat dire in the short term," said Martin King, a forecaster with FirstEnergy Capital.

Despite the crash, King expects the Canadian oilsands will keep pumping out oil. He says the operational costs for an in-situ operation are $8 US a barrel and the break-even point is about $40 US. The longer-established oilsands mines have operational costs of $25 US and a break-even point of $35 US. 

"All of these projects are losing money on a per barrel basis right now. All losing money. Will they shut in? Unlikely. They build these to last 40, 50 years or longer," said King.

Oilsands companies are choosing to defer future projects, which could mean an anticipated cut in supply by 2020 of 250,000 barrels per day, according to King.

Oil lower than it should be

While oil keeps sliding, some experts wonder if the markets have overreacted to the crude oversupply.

Michael Wittner, the head of oil research with Société Générale, said there is so much fear about commodity prices that prices may have shot to the downside. However, in the same breath, he warns prices might keep dropping.

"The market continues to look in the short term looking towards U.S. shale, because it is the most price sensitive, to be the first mover in the rebalancing process underway," said Wittner. "As long as it is not happening, absolutely prices could go lower. There is nothing stopping them from going lower."

All four oil forecasters avoided declaring that oil prices have reached the bottom, although they suggest that should happen later this year.