[conservatism_IS_compassion]

quoting an average price like $60 doesn’t address the fact that such a quote means about half (perhaps) of the wells need a higher price for breakeven. That depends on oil flow, and if the drillers can make a good prediction on that, and the well won’t flow enough to make money at $60, it isn’t going to get drilled, which means the truckers won’t be needed on that well nor the proppant shipment.

"Some 98 percent of crude oil and condensates from the United States have a breakeven price of below $80 and 82 percent had a breakeven price of $60 or lower,

IOW words, $60 may kill the industry about 1/2 dead.

"

The logic of the Strategic Petroleum Reserve would suggest a protective tariff on fuel to keep the Saudis from whipsawing us. Is the Strategic Petroleum Reserve storage system obsolete now? Isn’t the glop they put in there hard to refine? Shouldn’t it be gradually used up, and (partially or fully) replaced with now-conventional shale oil, to be more credible as an emergency reserve?

[thackney]

Is the Strategic Petroleum Reserve storage system obsolete now? Isn’t the glop they put in there hard to refine?

Glop?

The SPR reasonably matches the mix of heavy and light oil ratio refined in the US.

[thackney]

The Strategic Petroleum Reserve (SPR) contains a number of domestic and foreign crude oils. For the most part, these are of light gravity (30 to 40° API) and contain less than 2.0 mass percent total sulfur. These crude oils are not segregated in storage but are commingled according to their sulfur content into two categories - one sweet and the other sour. For the purposes of the SPR, sweet crude oils are defined as containing a maximum of 0.50 mass percent total sulfur, while sour crude oils can contain up to a maximum of 1.99 mass percent total sulfur. Only similar quality crude oils are commingled in storage, with no mixing of sweet and sour streams being practiced.

The crude oil inventory comprising each of the eight SPR streams is stored in from two to 13 caverns, depending on the site. The attached assays for these eight streams is a volumetric average of the assays for the individual caverns comprising each stream.

http://www.spr.doe.gov/reports/Crude_Oil_Assays.htm

[Owen]

“

“Some 98 percent of crude oil and condensates from the United States have a breakeven price of below $80 and 82 percent had a breakeven price of $60 or lower,

IOW words, $60 may kill the industry about 1/2 dead.”

Misunderstanding. That’s the entire oil industry’s breakeven price.

The industry I’m referring to that gets killed 1/2 dead at $60 is the shale oil industry. Not the entire country’s oil flow. Just shale, the current poster child for bright future.