Sign up to save your podcasts
Or
Share Global Commodities: $45 is the new $55
Share to email
Share to Facebook
Share to X
Share to email
Share to Facebook
Share to X
Or
Global Commodities: $45 is the new $55
President Trump wants lower energy prices and higher oil and gas production and exports—objectives that seem irreconcilable, given the relatively high cost of producing oil from US shale formations. We estimate that US energy companies need WTI crude prices of $55/bbl and natural gas at $3.50/MMBtu for drilling to be profitable, with $75 and $3.75 required to significantly increase drilling. However, reducing royalties and taxes, easing methane regulations, and streamlining federal drilling permits could lower breakeven costs by $10/bbl for oil and $0.60/MMBtu for gas. On a production-weighted average basis, this would reduce the breakeven point for US oil production from $55 to $45. Ultimately, the impact of these lower costs on US oil production depends on the decisions of the 275 independent companies in the upstream shale sector.
Speaker:
Natasha Kaneva, Head of Global Commodities Research
This podcast was recorded on 31 January 2025.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4895361-0 and for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2025 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
View all episodes
By J.P. Morgan Global Research
4.2
6464 ratings
President Trump wants lower energy prices and higher oil and gas production and exports—objectives that seem irreconcilable, given the relatively high cost of producing oil from US shale formations. We estimate that US energy companies need WTI crude prices of $55/bbl and natural gas at $3.50/MMBtu for drilling to be profitable, with $75 and $3.75 required to significantly increase drilling. However, reducing royalties and taxes, easing methane regulations, and streamlining federal drilling permits could lower breakeven costs by $10/bbl for oil and $0.60/MMBtu for gas. On a production-weighted average basis, this would reduce the breakeven point for US oil production from $55 to $45. Ultimately, the impact of these lower costs on US oil production depends on the decisions of the 275 independent companies in the upstream shale sector.
Speaker:
Natasha Kaneva, Head of Global Commodities Research
This podcast was recorded on 31 January 2025.
This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4895361-0 and for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2025 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.
More shows like At Any Rate
View all
Bloomberg Surveillance
1,177 Listeners
Notes on the Week Ahead
191 Listeners
Insights Now
95 Listeners
Goldman Sachs Exchanges
985 Listeners
Eye On The Market
266 Listeners
UBS On-Air: Market Moves
170 Listeners
Making Sense
57 Listeners
Thoughts on the Market
1,264 Listeners
Wall Street Week
59 Listeners
Macro Hive Conversations With Bilal Hafeez
99 Listeners
Global Data Pod
15 Listeners
FICC Focus
29 Listeners
The Macro Trading Floor
212 Listeners
The Credit Edge by Bloomberg Intelligence
21 Listeners
Goldman Sachs The Markets
76 Listeners