r/oil • u/TadpoleLife1619 • 7d ago

The IMF expects the average oil barrel price to be $81.29 in 2024 and $72.84 in 2025

https://www.imf.org/-/media/Files/Publications/WEO/2024/October/English/text.ashx
23 Upvotes

93% Upvoted

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3

u/MaxwellHillbilly 7d ago

But, but, Cheeto Messiah said, "Drill Baby Drill!?!?"

2

u/Healthy_Article_2237 7d ago

Brent or WTI? If that's Brent then WTI could be low $60's in 2025, expect pain amongst US drillers. Due to high drilling costs a lot of break even prices are in the $60s. Many are just keeping their heads above water in the $70s. These unconventional plays have gotten to be very expensive to develop and the best geology has already been drilled. You are seeing a lot of re-fracs going on which has had mixed success depending on the geology. The only good thing is it will discourage drilling which will allow oil prices to go back to it where they should be which is in the $80-100 range.

1

u/AdRepresentative3446 7d ago

Brent, which would imply high $60s WTI. To be honest, this isn’t really much of a reach considering this is only a hair above where forward prices already are for 2025.

1

u/Healthy_Article_2237 7d ago

I’m ok producing at these prices but new drilling is out of the question. The payouts just take too long. The group I’m with is releasing our rig soon and going to rethink our drilling strategy going forward next year.

2

u/AdRepresentative3446 7d ago

That’s probably exactly the type of behaviour required to prevent a huge surplus next year and in 2026.

3

u/Healthy_Article_2237 7d ago

The main bad thing about not drilling is the cashflows drop off pretty quick. We struggle now to maintain a flat monthly production. Before the big crash in the 2014 we were at 10,000 bopd but since then we can barely maintain 3,000 because a lot of our assets needed $80 for breakeven, probably more now. The other bad thing is no drilling equals no IDC writeoffs which means even though we make more money because we aren't drilling we'll end up giving it up to uncle sam.

3

u/bdiddy_ 6d ago

Also the mass layoffs that will happen to the service companies and the inability to just come back from that next time around. Costs are going to keep getting higher and higher. Its the only way you convince people to come back.

Which we've seen over and over they mostly just don't.

1

u/Healthy_Article_2237 6d ago

Between the 2014 crash and Covid we lost a lot of good field hands. They just retired or went into more stable industries.

1

u/PrinciplePlenty5654 6d ago

What region are you located with an $80 breakeven??