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by Stockwatch Business Reporter

West Texas Intermediate crude for October delivery lost 71 cents to $38.60 on the New York Merc, while Brent for October lost seven cents to $43.14 (all figures in this para U.S.). Western Canadian Select traded at a discount of $14.25 to WTI ($24.35), up from a discount of $14.60. Natural gas for September added 0.8 cent to $2.693. The TSX energy index added 3.80 points to 161.39.

Canadian Oil Sands Ltd. (COS) edged up two cents to $6.12 on 4.95 million shares, which, when added to the 34 cents it added yesterday, means that it has nearly recovered the 41 cents it lost on Monday. It faced two negative events on Monday. The first, of course, was China's market crash, which battered markets worldwide, at one point sending the TSX energy index to its lowest level in a dozen years. Canadian Oil Sands also received some company-specific bad news late on Monday after Moody's downgraded its debt rating to Baa3 and kept its outlook negative. "The negative outlook reflects Moody's expectation that debt to EBITDA will remain above five times through 2016 ... and that [Canadian Oil Sands] will continue to debt fund negative free cash flow in the current price environment," wrote Moody's. Specifically, Moody's estimated that Canadian Oil Sands will generate about $125-million in negative free cash flow from June 30, 2015, to Sept. 30, 2016, and will cover that by taking on more debt. The current debt level is around $2.4-billion. Moody's did point out that none of the debt matures until 2019, that there is still $945-million available on a $1.5-billion bank line and that the company is not expected to breach its financial covenants, so its report was not all bad. Insiders showed a spark of support for the company last week. IR woman Siren Fisekci bought 500 shares on Aug. 21, and Scott Greenshields (a vice-president) bought 3,000 shares on Aug. 19.

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