Shale oil cost advantage is not obvious

Although the mainstream institutions statement shale oil development costs vary, but generally accepted view is that shale oil cost at least $ 75 / barrel and above. Although hydraulic fracturing another breakthrough,Unconventional gas a single horizontal well costs from $ 25 million down $ 8 million, but the current crude oil prices are still not very attractive.
In early June this year, Sinopec acquired from Pioneer Resources Division West Texas 207,000 acres of shale oil assets, for example, the cumulative output of only one million barrels / day, according to the region's oil fields, the average decline rate calculation, the next five years, the cumulative production of approximately of 500 million barrels. Mined at the lowest cost, only the amortized cost of drilling close to $ 65 / barrel, while taking into account the maintenance of hydraulic fracturing and drilling, mining costs will be $ 80 or more. The costs for the current shale oil mining the main - small independent oil companies, the current oil price is not very impressive attraction. From the perspective perspective,ceramic ball in 2015 the WTI forward price is always $ 80 or less, difficult to enhance oil production support.
Thus, with the restoration of supply and demand structure, the second half of the upstream oil market appears more likely. Half of the U.S. and European oil fast convergence, reflecting the U.S. since last year structural imbalance between supply and demand shift to the global market, but with the second quarter of the U.S. recovery in consumption and supply growth slowed, the structure of supply and demand will also radiate repair.fracturing proppant In this context, it is expected in the second half of New York and London oil prices will rise again to $ 105 and $ 112 above the level.