The Financial Post reports in its Friday edition that Canadian heavy crude fell to near $40 (U.S.) a barrel, threatening projects under construction as producers boosted output and space on a pipeline was rationed. A Bloomberg dispatch to the Post reports that Imperial Oil is hiking output at its Kearl oil sands project to 110,000 barrels a day after a shutdown last month. Enbridge apportioned space on the Spearhead pipeline, which carries Canadian crude south to Cushing, Okla., after demand to ship on the line exceeded capacity. Heavy West Canadian Select rose on Thursday after falling to $42.19 (U.S.) a barrel Wednesday. Crude has fallen into a bear market as United States output surges to a three-decade high. Cenovus Energy said Thursday it will review its capital expenditure program in the first quarter. Canadian Natural Resources has said it may scale back investment plans if oil prices remain near current levels. Canadian Energy Research Institute vice-president Dinara Millington says, "Any production that's currently under construction is at risk, absolutely." ARC Financial's Jackie Forrest says: "For existing operations, you need to cover your operating costs. We're still above those thresholds."