The price of a barrel of the North American crude oil benchmark on Friday dipped below $40 US a barrel for the first time in more than six years.

West Texas Intermediate, as the most common blend on the continent is called, ended up settling at $40.45, a drop of 87 cents from Thursday. But earlier in the day, it changed hands as low as $39.86 a barrel — the lowest price recorded since the spring of 2009.

Back then, the global economy was emerging out of a global recession, and oil was on its way higher after setting a record low close of $33.98 a barrel on Feb. 12, 2009. By the end of the year, oil was in the $75 range.

This time, however, it's an open question as to where oil is headed next. Influential market watcher Gary Shilling predicted that oil prices could go as low as $10 this year because the world is still producing about three million more barrels of oil every day than it needs to satisfy demand.

Data this week showed 456.2 million barrels of oil are in storage in America.

That's about 100 million more barrels than the normal level seen this time of year, and more is coming as American producers pumped out 9.52 million barrels a day last month, official data showed this week. It's the highest output for July since 1920.

Loonie drops in line with oil dip

The oil market is also headed into a time of year when prices tend to decline for seasonal reasons.

U.S. refineries typically shut down or scale back for a few weeks in late summer for maintenance and to recalibrate.

"When they do that, that reduces demand for crude oil," Scotia McLeod portfolio adviser Andrew Pyle said in an interview. "It increases concerns."

Now that we've breached $40 US, Pyle notes many analysts say there's no telling where the next floor might be.

"Once we get below 40 which many see as a psychological barrier, theoretically there is no low point where we say 'that's where oil prices will stop,'" Pyle said.

The price of WTI was lower for an eighth straight week — the worst streak for oil since 1986, when the price of a barrel troughed to around $10 a barrel.

The loonie sold off on oil's weakness, losing more than half a cent to dip below 76 cents US.

Oil producers move to preserve cash

As oil prices continue to fall, more producers are having to take action to preserve cash.

Late Thursday, Calgary-based Baytex Energy became the latest company to slash or eliminate its stock dividend.

In a statement, Baytex said it would suspend its monthly cash dividend of 10 cents a share after the Sept. 15 payment.

"It is imperative that we position our company to withstand the current low commodity price environment," said CEO James Bowzer. "We are committed to taking the difficult but necessary steps to ensure the long-term sustainability of our business.

The company also said it would cut its capital spending -- a move many producers like Suncor Energy and Canadian Natural Resources have taken in the last few months.

In addition to announcing a spending cutback, Canadian Oil Sands Ltd. chopped its dividend in January by 86 per cent.

Last week, Crescent Point Energy slashed its monthly dividend from 23 cents to 10 per share.

According to Bloomberg, only 24 of the 63 energy companies in the S&P/TSX energy index had positive free cash flow as of Aug. 17.

