As I said the other day, the oil prices are crashing again because of shale oil. At this point in time, the ease of extraction (and hence the price) of Shale oil is highly technology driven. How to extract oil that is inside rocks. Here is some information someone sent me (thank you).
Evolution of more new technologies is pushing down the breakeven price for shale oil.
breakeven prices dropped significantly among all shale plays
since 2014, average decrease around 46%
reduction in unit prices, 57% of decrease
efficiency improvements 26%
Permian Midland wellhead breakeven US$71/b in 2014 to US$36/b in 2016
Permian Midland wellhead breakeven US$71/b in 2014 to US$36/b in 2016
49% decrease highest among all main shale oil plays
In this graph above, all the major shale oil plays in
the US are breaking even at below US$40 a barrel.
The famous Bakken field's BE is US$29 only !
to make rigs idle, prices must fall < US$40
leaner, meaner, resilient U.S. shale wiping out OPEC
OPEC caught between rock and hard place
deepen cuts and lose market share to U.S. shale
or ditch price-fixing and oil price war begin
structural changes
structural changes
improved well performance
improved efficiency gains
lower completion cost
Here is an oil price forecast by some oil people (baseline, upside and downside).
The 'baseline' forecast until 2019 is all below US$60 already.
Today's price (West Texas) is already US$48 per barrel.
But note the "downside" forecast for 2018 and 2019.
US$36 for 2018 and US$34 for 2019.
Tell your sons and daughters to get out of oil and gas.
Get into manufacturing and technology added products.
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