The war between oil shale and crude oil; dream or realityViews : 800
TEHRAN January. 25 2018 (idrooil) -- This article published in September 2015, when the oil and oil shale war peaked and Some analysts believed that oil prices would fall below 10$ per barrel.
Sept. 09 2015(Shana) – By Peyman Jonoubi
A glance at oil price fluctuations from August 2014 to August 2015 for Brent crude oil shows that the prices have never kept much long below $48.
During the mentioned period, prices rebounded three times when they crossed the $48 breakeven price.
Albeit, the prices have never returned to their levels before August 2014 to nearly 100$ /b which is mostly attributed to fundamental market determiners, i.e. supply and demand.
Figures released by the International Energy Agency (IEA) indicate that crude oil oversupply has been the major cause of the price slump since June 2014.
Oversupply has reached 2mb in September 2015 from 1mb in September 2014 which has led to the 60% drop in the global prices for the commodity.
Now that some OPEC members like Saudi Arabia export unprecedented crude oil amounts to more than 1.5 more than the market need, disregarding OPEC's agreed 30mb/d ceiling, the prices keep maintaining at the $48 level and even if they fall any lower, the fall may not be much lasting.
This means that costly oil output by American frackers and other unconventional producers have to stay out of the market when prices go any lower than 50 dollars and once prices cross the breakeven level ($48), they flood the market, add to the oil supply glut, lower the prices, become uneconomical and again have to stay out of the market.