Analyst sees oil dropping to $50 on global economic slowdown

[Richard T]

Hi Stefaan.

http://www.opec.org/home/basket.aspx

Yearly average Oil barrel prices were below 80$ before 2008 (see link above).
Somehow, I doubt that production cost followed the curve of the market.
But of course, it would suit the oil companies well to suggest the cost of production is higher than it actually is. Simply makes them look better (or not as bad).

Extraction from tar sands, like they do in Alberta, Canada, is quite expensive though.

Alberta is an important oil provider to the US.

[stefaan]

Originally Posted by Richard T

Hi Stefaan.
... Simply makes them look better (or not as bad).
... Extraction from tar sands, like they do in Alberta, Canada, is quite expensive though.

Is the "basket" price the price to produce the oil?

Peak Oil tells us production costs will raise higher and higher.
But then you have indeed, dominee Lindsay Williams who claims there's an oil field above Alaska twice as big as the greatest fields in the middle-east. In his view peak oil is a hoax.
Who can we believe these days?

[Richard T]

Basket price is not production cost. But what the market pays for oil could not go below cost. If that happened, producers would reduce their production and price would go straight up.

If there is something I am sure of is that the oil cartels are not in it to lose money.