Average prices will go down, including for the break even costs. But some of that isn’t a change, it is just shelving the more expensive side of items.
For an example, say a company has 10 areas where they were considering investing for new oil production. Break even cost for them are: 51, 53, 55, 57, 59, 61, 63, 65, 67, 69 $/bbl. Their average break even costs are $60/bbl.
If they just shelve the top 5 most expensive projects, they just lowered their break-even cost to $55/bbl. No technology change, but still lower average cost. They will just produce less until prices climb up.
Combine that with during a slow down, the premiums being paid the past couple years for equipment, material and labor go down.
Rex Tillerson says Exxon can operate at $40.00 a barrel....He’s the CEO are we suppose to believe 1)He is stating the absolute lowest price 2) Exxon Mobile can operate cheaper than any one else 3) the break even point is a theoretical number corporations give to support their real intensions witch is to make the landing not so hard!!I’m skeptical of anything a corporation says publicly....their one and only loyalty is to the stockholders...not the consumer...and the stockholders should be their priority!!