I am too but I will try.Originally Posted by lovbyts
They (the Saudis) can produce a barrel of oil for around $10 a barrel of oil and sell it for $40, thus making a profit. For the US shale plays, some operators need oil to be around $60-75 a barrel to turn a profit. We have to go deep into the ground to find it whereas they only have to a few thousand feet. During down times like the present one, companies will invest in research on finding more economical ways to extract the oil (ex. Horizontal drilling). I'm sure Rigpig could explain the completion part.
One thing that I am still trying to understand is the way contracts and futures. I know that some states were counting on oil to be $80 a barrel for their budgets and now scrambling to make cuts and what not to keep up with the sliding price. I will look more into it and try to find some articles on it.
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