courtesy Suncor

Traders believe the price oil is artificially high and will come down, and when it does, oil sands will feel the squeeze more than any other oil company projects under the unfolding regime of tight lending.

“Companies involved in oil sands development use very long time frames,” Andrew Boland, managing director for research at Peters & Co. in Calgary, told newspaper The Globe & Mail Tuesday after reporting another analyst saying “Oil sands will get hurt the most.”

The Canadian newspaper noted that “so far”, Canadian producers are still moving ahead with their heavy oil expansion projects, many of which were planned long before oil approached $90 or a $100 dollars a barrel.

Even a changed royalty regime expected for oil sands province Alberta, to kick in in early 2009, has not forced project cancellations.

The stock of Canadian oil sands producer Suncor was one of many oil producers Scandoil.com reported suffering a stock price set back of more than 10 percent on Monday.

Scotiabank, a major lender to oil companies, on Monday also predicted the Canadian and world economies would follow the U.S. economy into recession next year.