$50 Per Barrel Continues U.S. Oil Boom, Bankrupts Saudi Arabia

By Chriss Street

The U.S. oil boom at a $50 a barrel price continues to profitably accelerate, while Saudi Arabia oil production with an $80-85 a barrel break-even cost continues to shrivel.

Reuters reported a 2018 average wellhead break-even price of $40.95 for America’s 5 top shale oil production regions of Eagle Ford, Bakken, Permian Midland, Permian Delaware, and Niobara. Even adding a 10 percent corporate overhead cost, the breakeven price is about $45 a barrel is still profitable on $50 a barrel oil.

With the price of West Texas Intermediate averaging $64.90 per barrel in 2018 and $56.07 currently, the U.S. Energy Information Agency reported American production hit an all time high of 12.1 million barrels per day (b/d) last week. EIA forecasts U.S. production average will grow to 12.4 million b/d in 2019 and 13.2 million b/d in 2020.

But according to the International Monetary Fund Director of Middle East and Central Asia department Jihad Azour, the 2019 per barrel breakeven price Saudi Arabia needs to balance its budget is “around $80-$85 dollars.” Azour forecasts that with Riyadh planning to increase entitlement spending by $20 billion this year, its breakeven cost will move higher..........Read more