Never Mind $35, The World's Cheapest Oil Is Already Close to $20
As oil crashes through $35 a barrel in New York, some producers are already living with the reality of much lower prices.
A mix of Mexican crudes is already valued at less than $28, an 11-year low, according to data compiled by Bloomberg. Iraq is offering its heaviest variety of oil to buyers in Asia for about $25. In western Canada, some producers are selling for less than $22 a barrel.
More than one-third of the global oil production is not economical at these prices, Ehsan Ul-Haq, senior consultant at KBC Advanced Technologies Plc, said by e-mail. Canadian oil producers could have difficulty in covering their operational costs.
Oil has slumped to levels last seen in the global financial crisis in 2009 amid a global supply glut. While the prices of benchmarks West Texas Intermediate and Brent hover in the $30s, they represent a category of crude -- light and low in sulfur -- that is more highly valued because its easier to refine. Some producers of thicker, blacker and more sulfurous varieties have suffered heavier losses and are already living in the $20s.
A blend of Mexican crude has plunged 73 percent in 18 months to $27.74 on Dec. 11, its lowest level since 2004, according to data compiled by Bloomberg. Venezuela is experiencing similar lows. Western Canada Select, which is heavy and sulfurous, has slumped 75 percent to $21.37, the least in almost eight years. Other varieties including Ecuadors Oriente, Saudi Arabias Arab Heavy and Iraqs Basrah Heavy were selling below $30, the data show.
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http://www.bloomberg.com/news/articles/2015-12-14/never-mind-35-the-world-s-cheapest-oil-is-already-close-to-20
RKP5637
(67,112 posts)back that all resources were going to be depleted and prices were soaring. That seems ancient history now.
4dsc
(5,787 posts)it would be the non-conventional oil sources that have led to this glut. But don't worry they are expected to peak in about 3-5 years.
FBaggins
(26,760 posts)A few true believers hold out hope with desperate spin... and no doubt the hype will resurface in a decade or two... but it was nonsense.
Hoppy
(3,595 posts)Peak oil is a logical conclusion. God, or Rockefeller or the dinosaurs made a finite amount of oil... those hundreds of thousands of years ago. Once it's drilled, its all gone.
The only question is, when we will reach that point.