[Owen]

Somewhat weak article.

First of all, the Bakken gets $20 less than WTI for its oil. It has widely varying metals content that is difficult for refineries, and of course, someone has to pay for the rail transport. So they are getting only $64/barrel right now.

Beyond that, 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.

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

[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]

It has widely varying metals content that is difficult for refineries

Any link for supporting that claim?