Making Money Minute with Ron Hiebert - Canadian Crude & US Demand
The problem with horizontal drilling in shale formations is the high rate of production decline these wells experience. This is tolerable when prices are high, but when they drop below $60 per barrel, which is the breakeven point for a lot of shale drillers, new production dries up. This is currently what is happening in the US. Fewer new wells coming on stream, means the US will import more oil to meet its needs. For Canada, which has oil sand producers with break even costs in the low $40’s, and the infrastructure to get oil down south, this is great news.
