Wednesday, December 10, 2014

Crude at $70 Puts at Least 1.5M B/D of Projects at Risk

The Canadian oil sands have a break-even price of $80 a barrel, US shale plays and other areas of tight oil ($76). Brazil’s deepwater fields ($75) and Mexican projects (around $70) are also vulnerable, reports FT.

With an oil price at around the $70 mark, at least 1.5m b/d of projects scheduled for 2016 are at risk, Energy Aspects estimates.



Note: Prices are now below even the $790 level. Light, sweet crude for delivery in January today  declined $2.62, or around 4%, at $61.23 a barrel on the New York Mercantile Exchange.

January Brent  slid $2.40, or 3.6%, to $64.47 a barrel on London’s ICE Futures.

3 comments:

  1. Is it possible then to have lower crude oil prices but higher gas prices at the pump?

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  2. I'll bet the neo-cons are sobbing because their dream of "energy independence" is in trouble. They don't care, of course, that lower oil prices are great for the consumer.

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  3. Interesting to compare to the chart in this earlier EPJ post, about countries' balanced budget break-even prices:

    http://www.economicpolicyjournal.com/2014/11/oil-break-even-prices.html

    Mexico has a balanced budget at $85 - production itself stops being profitable at $70. Relatively little dependence.

    Russia on the other hand, has a balanced budget at $100, but will only stop production once it falls below $45. Much higher dependence!

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