Never Mind $35, The World's Cheapest Oil Is Already Close to $20

[Purveyor]

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 it’s 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 Ecuador’s Oriente, Saudi Arabia’s Arab Heavy and Iraq’s Basrah Heavy were selling below $30, the data show.

more...

http://www.bloomberg.com/news/articles/2015-12-14/never-mind-35-the-world-s-cheapest-oil-is-already-close-to-20

[RKP5637]

1. This may be a dumb question, but what happened to all of the "peak oil" panic a few years

back that all resources were going to be depleted and prices were soaring. That seems ancient history now.

[4dsc]

3. Conventional oil has peaked

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.

[RKP5637]

4. Thanks! n/t

[FBaggins]

5. Peak Oil panic peaked - and is now in terminal collapse

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]

2. Peak oil and the present conditions can co-exist.

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.