Posted on 10/06/2014 7:05:22 AM PDT by thackney
Without doubt. However, is there a price per barrel floor where the shale play becomes not profitable and production stops or slows down? I read once the floor price needed to be around $95.00 per barrel due to the cost of tech involved.
I read once the floor price needed to be around $95.00 per barrel due to the cost of tech involved.
There is not a magic number where it all stops and starts.
But the average price price where continued investment required to make the increases exceed the decreases is would be lower than that, by $15~20 bucks or more is my guess with current technology. Different fields will have different numbers for costs.
And it depends on the length of the dip in price. Majors would be more likely not to slow down drilling if they believe prices would climb back up in a short enough time. Smaller independents may have more cash flow issues. Current prices for those that bet in the futures market is trending down.
Crude Light Oil Comp. - NYMEX
http://online.wsj.com/mdc/public/page/2_3028.html?category=Energy&subcategory=Petroleum&mod=topnav_2_3012
Lots of refinery expansions here in SE Texas.
Also need to factor in the the possibility that the drilling companies will continue to find more efficient (cheaper) ways to extract the oil.
Yeah, I tried to get in my weasel words. One thing sure about the business, something is going to cause a change in the future. Good, bad, another locations, another market, etc...
I was at a conference in August where a consultant for the oil industry stated it was around $80/bbl
Couple of things at work here. First one is the oil from Bakken and Eagle Ford. Second is the lower prices drop, Russia, Iran and the Saudis feel the impact. Good for the ISIS haters and the Ukrainians. So I would tinfoil hat this and say we are financially squeezing countries to get our point across.
That “unnecessarily skyrocket” comment by Obama? He killed the middle class for 6 years. Having oil go down to 2 bucks a gallon will be a good thing for the rat candidate in 2016. People will forget about the high prices and be grateful for his lordship.
It’s been $2.99 for the last month or two in Roanoke at a lot of places.
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