Profitability of $100 oil
By STEVE AUSTIN for OIL-PRICE.NET, 2008/01/05
$100 per barrel: the line was finally crossed on January 2nd 2008.What does this imply for profits of oil producing nations?In order to run some numbers we have to consider a key measure called the break-even pricewhich is the amount of money it takes to extract 1 barrel of oil.
The break-even price is the first thing oil companies establish in order to determine if drilling a new wellmakes financial sense. From the break even price, profitability can easily be determined with the following formula:
Profitability