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Showing posts with the label cost of oil production

The Winners and Losers of Low Oil Prices-The Sweet Spot

There are advantages and disadvantages to oil. Some nations will capitalize on lower oil prices while others may see significant economic decline. Those dependent on exports are going to feel the most pain while those important oil are going to find the most benefits. Below is a video on the negative factors of low oil that appears to cover the issue from a shale industry perspective. Oil price has more of a sweet spot that is adjusted as technology, consumption, and production change. The break even point of shale oil is somewhere between $60 and $80 per barrel (As cited in Bloomberg) .  At present prices are between $74 and $80 per barrel; dangerously close to the break even point for shale companies. This of course means less hiring and expansion for this relatively new industry. When oil dips under $80 it puts pressure on international producers. Despite the potential short-term damage to this new industry the general economy grows when oil is in the zone. Where the benefits of