OPECs strategy of letting prices fall in an effort to clear the market of American shale oil producers will fail. While Fracking is unsustainable if oil prices go below $50 or $60 per barrel, the break-even points for most OPEC members are much higher. Countries that depend on oil revenue — such as Saudi Arabia, Iraq, Iran and Venezuela — need prices in the range of $100 to $130 per barrel to balance their budgets. Crude oil prices are already in the high $50s or low $60s, and these countries could be facing serious instability while they cut their budgets as they wait for the American producers to go belly up. Which they wont, as new technology is making fracking cheaper and more efficient.
Posted on: Mon, 22 Dec 2014 17:39:47 +0000
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