What is the break even price for fracked oil?
I think I read $60.
A couple thing to understand before answering your question.
First, we use hydraulic fracturing on a lot more than just tight formations like shale fields.
Second, there is not a single number, not even for individual fields. There is average or median prices, but dropping from $100 to $80 will start lowering the amount of drilling. First the marginal locations and the production companies that have too much debt.
Even if price drops down to the average break even, that means about half is still drilling. Companies with better financial positions and believing that the dip in price is only a dip, that it will return back up to more profitable levels, they will keep drilling new wells. They will take advantage of the drop in cost due to drilling rigs coming off lease and crews wanting more work.
The Brea even price keeps falling as the technology, efficiency and productivity increases.
Oil & Gas have tripled productivity in the last 4 years. Wind & Solar tool more than 40 years to double their productivity, despite trillions invested worldwide.
So, the breakeven will continue to fall over time making the alternatives look worse and worse.
Per an article I read the other night on FR it is 67 bucks ppb and some change in the US but Russia, near totally dependent on oil for govt revenue, needs 104 bucks ppb and some change just for Putin to pay the light bill at the Kremlin.
So, Russia, all seem to agree, is in deep door do right now!
I have read it takes about a buck for saudi arabia to get a barrel in 1975.
I hear it still costs them a buck,
Just many more hands in the pie.
The problem as I see it for OPEC countries is they don’t diversify the investment of their oil profits by putting in other business to employ people. When you sit back and just support the people from oil profits and they all sit home and do nothing thinking “hey we have oil, why work”, when the oil price bites the bullet, you’re in deep dodo. If you have sand, put in a glass plant. build refineries and export the final product. Do anything with those oil profits to employ people and not giving it all for welfare support and market investing. Any country that’s dependent on a single product is very vulnerable.