Ft article that quotes Bernstein’s energy analysts:
"While OPEC plays a key role in influencing price through production quotas, in the long run we believe that it is the marginal cost of non-OPEC production which sets the oil price. As global demand has surged over the past decade the marginal cost of production and oil prices have increased, as the industry has venture to increasingly higher cost (smaller, deeper fields) and more marginal regions (deep water, high arctic) to produce the incremental barrel of oil."
This is what I said last year:
"The implication of Saudi Arabia being an “emperor who has no clothes” is that the cost of extraction of unconventional oil coming from sources like Brazil and Canada are much more likely to drive oil prices than marginal costs have in the past. "
Marginal costs are now approaching $100 US per barrrel.
"While OPEC plays a key role in influencing price through production quotas, in the long run we believe that it is the marginal cost of non-OPEC production which sets the oil price. As global demand has surged over the past decade the marginal cost of production and oil prices have increased, as the industry has venture to increasingly higher cost (smaller, deeper fields) and more marginal regions (deep water, high arctic) to produce the incremental barrel of oil."
This is what I said last year:
"The implication of Saudi Arabia being an “emperor who has no clothes” is that the cost of extraction of unconventional oil coming from sources like Brazil and Canada are much more likely to drive oil prices than marginal costs have in the past. "
Marginal costs are now approaching $100 US per barrrel.
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