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Yes, a barrel of oil brought up by fracking costs around $62 (Canadian oil sands cost $74) per barrel(according to NPR below). Though that is total cost, margi
by stonemetal 11y ago
Yes, a barrel of oil brought up by fracking costs around $62 (Canadian oil sands cost $74) per barrel(according to NPR below). Though that is total cost, marginal cost of pumping after you drill and frack the well is around $35.
Oil demand tends to be fairly inelastic. Almost all of oil pricing is supply driven. OPEC decides on a target price and produces to meet that price. The current price has happened because Saudi usually stops producing to keep prices stable and high, and for now they just haven't slowed down at all. Either they need money badly enough that they will take any profit at all or they are using oil prices as a weapon.
http://www.npr.org/2014/11/04/361204786/falling-oil-prices-make-fracking-less-lucrative http://www.npr.org/2014/11/04/361204786/falling-oil-prices-m...
- andys627 11y agoI don't understand the "they need the money argument". They were producing 9 million barrels per day and that achieved a price of $100 per barrel... now they are producing 10.5 million barrels per day and price is <$30 per barrel.
- celticninja 11y agoother nations have increased supply whilst demand has fallen at the same time, therefore to sell the extra oil being produced prices have to fall.
- simonz05 11y agoIf the future outlook for oil prices are lower than what they sell at today — it makes sense to produce as much as you can today.
- protomyth 11y agoFracking in ND is much lower than $62 depending on the site. $36 was the cited figure in a lot of articles and post (see my previous comments).