Industrial Insight

Shale Oil | October 13, 2014

http://www.bloomberg.com/news/2014-10-07/shale-boom-tested-as-sub-90-oil-threatens-u-s-drillers.html

Shale Boom Tested as Sub-$90 Oil Threatens U.S. Drillers By Isaac Arnsdorf Oct 8, 2014

Shale oil is expensive to extract by historical standards and only viable at high-enough prices, Ed Morse, Citigroup Inc.’s head of global commodities research in New York, said by phone Sept. 23. Oil from shale formations costs $50 to $100 a barrel to produce, compared with $10 to $25 a barrel for conventional supplies from the Middle East and North Africa, the Paris-based International Energy Agency estimates.

“There is probably something to the notion that if prices fell suddenly to $60 a barrel, the production growth would turn negative,” he said.

Brent crude could drop to $80 a barrel before triggering a slowdown in investment from U.S. shale-oil drillers, Fitch Ratings said in a report today.

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1 Comment »

  1. Despite the the drop in oil and gas prices since spring, unconventional drilling activity in North America remains strong. The practce is becoming increasingly efficient and productive and may actually be contributing to the drop in market price.

    Comment by Steve Ryan — October 14, 2014 @ 5:49 pm


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I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.

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