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Oil Below $50

jodywy

Well-known member
break even fracking costs some are low others high.
http://www.bloomberg.com/news/2014-10-17/oil-is-cheap-but-not-so-cheap-that-americans-won-t-profit-from-it.html
 

Mike

Well-known member
Bakken breakeven = approx. $73.00

What's hurting even more is the transportation costs by rail.

I read somewhere that it costs about $8.00 more per barrel than it would by pipeline.

May not be long before Williston is a ghost town. Banks won't make loans in this atmosphere.
 

Brad S

Well-known member
I remember hearing a radio show out of Minot. The overall jist might be characterized as "how smart everyone in ND is and this boon will last forever."
Oops. It was good while it lasted.
 

Steve

Well-known member
the inefficient producers will fail ,. but the low cost can't be sustained for ever


Saudi Arabia needs Brent oil prices to exceed $91 a barrel to pay its bills, according to IMF estimates. That’s interesting, because Saudi Arabia actually has the ability to drive the price higher but has so far declined to do so. The biggest OPEC producer, with almost $800 billion in cash reserves to lean on, is opting instead to maintain market share and to test the break-even points of U.S. shale oil.

It’s a tough test, and OPEC may not like the results. The break-even for American oil has been falling as fracking techniques are refined. The U.S. is producing unconventional oil with acceptable returns in the range of $70 a barrel for oil, less than most OPEC nations can sustain.

add in that we can print more dollars to manipulate the currency wars as we see fit..
 

Brad S

Well-known member
Prior to the directional drilling advances, valley county was just another hard scrabble area. Nothing wrong with that, but it's definitive how quickly a little prosperity eclipsed humility in some.
 

Mike

Well-known member
. We are seeing downgrades of energy companies. Layoffs and lack of investment and the promise of what might have been are now turning into economic pain. Just consider ground zero of the fracking revolution and you can see how this drop in oil can see fortunes quickly change. Jennifer Brooks, of the Star Tribune, wrote an article warning of tough times ahead for the North Dakota energy boom. She says that while the North Dakota oil boom isn’t going bust just yet, the state is bracing for bad economic news that could ripple far beyond its borders. She quotes Ron Ness, president of the North Dakota Petroleum Council, as saying “I think we’re going to see a fairly significant correction, you’re going to see a tremendous number of pink slips over the next quarter and into the following quarter. And if we’re having this discussion in June, it will be that much more severe.”
 

kolanuraven

Well-known member
Mike said:
Bakken breakeven = approx. $73.00

What's hurting even more is the transportation costs by rail.

I read somewhere that it costs about $8.00 more per barrel than it would by pipeline.

May not be long before Williston is a ghost town. Banks won't make loans in this atmosphere.

Quiet of few from here who left out to work in the Bakken have returned home due to lay off or just out right job termination. They say by Spring, lots of layoffs will happen
 

Mike

Well-known member
kolanuraven said:
Mike said:
Bakken breakeven = approx. $73.00

What's hurting even more is the transportation costs by rail.

I read somewhere that it costs about $8.00 more per barrel than it would by pipeline.

May not be long before Williston is a ghost town. Banks won't make loans in this atmosphere.

Quiet of few from here who left out to work in the Bakken have returned home due to lay off or just out right job termination. They say by Spring, lots of layoffs will happen

Exactly the Saudi's intentions.
 

hypocritexposer

Well-known member
Mike said:
Exactly the Saudi's intentions.

Mike, it's not the Saudis, or OPEC, that has upped production. Their volume has remained the same for years.

It is increased US production and a slowed global economy that is lowering the price.
 

Brad S

Well-known member
I think the Saudis maintaining steady production at current market prices is a large production increase compared to Saudi production levels at <$50 oil 7 years ago.

I generally hate market intervention and manipulation like OPEC has been doing for decades. At some point it may be wise to protect US domestic O&G production from OPEC.
 

Mike

Well-known member
hypocritexposer said:
Mike said:
Exactly the Saudi's intentions.

Mike, it's not the Saudis, or OPEC, that has upped production. Their volume has remained the same for years.

It is increased US production and a slowed global economy that is lowering the price.

I know that. But the Saudi's refusing to cut shipping is helping to maintain low prices. They know their production costs are lower than ours.
 

hypocritexposer

Well-known member
Mike said:
hypocritexposer said:
Mike said:
Exactly the Saudi's intentions.

Mike, it's not the Saudis, or OPEC, that has upped production. Their volume has remained the same for years.

It is increased US production and a slowed global economy that is lowering the price.

I know that. But the Saudi's refusing to cut shipping is helping to maintain low prices. They know their production costs are lower than ours.

In Alberta we are kinda wishing the US would produce less :wink:

I don't think it is OPEC's responsibility to look after the US' interests. The US should adapt...maybe export, allow for oil with foreign content to be exported etc.

It's kinda funny watching all the "NIMBYs" worried about Canadian oil being transported through the XL to be exported...seeing as it would not be eligible for export if it is mixed with US oil, on the way to the Gulf.
 
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