With the shootout loss, the Oilers' record drops to 26-35-7 on the season.
The Oilers return home to take on the San Jose Sharks on Monday night. Game time is 7:30 p.m. MST and it can be seen on Sportsnet West.
Cody McLeod and Peter Mueller's second-period goals erased a 1-0 Oilers lead, but Taylor Hall responded to square the score late in the game. Despite the comeback and heroic, 30-save effort from Nikolai Khabibulin, the Oilers dropped a 3-2 decision in a shootout at the Pepsi Center.
Colorado registered the game's first three shots, but the Oilers' newly concocted third line -- consisting of Lennart Petrell, Shawn Horcoff and Ryan Smyth -- almost engineered goal less than two minutes in. From the slot, No. 10 ripped a screened wrister on goal, but his attempt caught Semyon Varlamov's glove-side post and stayed out.
With Ryan Jones causing havoc near the period's midway mark, providing Eric Belanger with an open-net rebound opportunity, Kevin Porter was assessed a minor for hooking No. 20 at 8:12, canceling the visitors' opening-goal bid at the time.
The Oilers peppered the goalie with three high-quality shots, including a long cross-ice connection between Ryan Whitney and Taylor Hall, but all were stopped.
Edmonton hadn't tallied a shot since the power-play opportunity; but when they did late in the period, they made it count. With Ryan Nugent-Hopkins accepting a Jordan Eberle pass on the rush, the rookie launched a hard wrister on goal. Varlamov made the initial stop, kicking the puck into the slot with his right toe, but Smyth crashed the crease and whacked it past the sprawling netminder, establishing a 1-0 Oilers lead with only 36.1 seconds to play.
The Oilers also carried an 11-8 shot lead into the middle period.
Jamie McGinn high-sticked Linus Omark 59 seconds into the period, putting the Oilers on their second power-play chance. The orange and blue struggled to gain the zone and maintain possession, succumbing to an 0-for-2 success rate without registering a shot on the latest advantage.
At 4:44, the Avalanche squared the score. Following a sequence in which Jeff Petry was unable to get the puck deep, a sloppy and ill-timed change allowed Colorado to counter. Ryan Wilson's centering pass into the slot connected with Cody McLeod, who one-timed the puck past Khabibulin on his team's 10th shot.
Less than six minutes later, Colorado went up 2-1. Milan Hejduk burst up-ice, burning Ryan Whitney wide in the process. His clever backhand try was denied with an athletic save by the Oilers' 39-year-old veteran, but Peter Mueller pounced on the rebound -- Ladislav Smid raced to the rescue, but he was too late as the puck was popped into the caping cage at 10:05.
To make matters worse, Andy Sutton was charged with slashing 33 seconds after the Avs took the lead, putting the home side on their first power-play of the afternoon. The Oilers controlled the pace for most, killing the penalty and regaining some much-needed momentum.
Through 40 minutes, the Avalanche continued to lead 2-1 and up were up with a 24-19 lead on the shot clock.
Linus Omark nearly equalized the score early in the stanza when he snapped a shot from the high slot that cranked iron. Moments later, Colorado's David Jones ended up in alone in a breakaway, but Khabibulin came up with a big save to preserve the one-goal disadvantage.
With the end-to-end pace continuing, Sutton was assessed his second minor of the night when he was called for tripping at 4:03. The Avalanche stormed the crease throughout, but were unable to cash another on the scoreboard.
With just under 10 minutes to play, the Oilers tied the game -- not according to the referees, however. Sam Gagner was called for goaltender interference on the play, wiping out a would-be Ales Hemsky goal and keeping the game in a 2-1 score on a highly-questionable (erroneous) call.
Late in the period, the Oilers battled back and made one count anyway. Jordan Eberle rifled a shot on goal, while Taylor Hall crashed the crease and, with his head buried in the ice, hammered home the 2-2 goal at 15:17.
With 2:46 to play, the Avalanche kept pressing. David Jones centered a pass to Paul Stastny who, with a quick shot, appeared to beat Khabibulin -- but the puck pinballed off the post, while the 'tender was able to pivot and snatch it with his glove, preserving the tied score.
No. 35 did it again moments later, emphatically denying Matt Hunwick with a thrilling, sprawling save.
Colorado continues its push, but Khabibulin was sensational, stoning Avalanche shooters at will and frustrating them to no end. Through 65 minutes, No. 35 had made 30 big-time saves to push the game to a shootout.