High oil prices are how America got be energy independent in the first place. When oil is pushing towards $70 every swinging **** in the oil patch is running to the bank to get a loan for a rig.
Production costs aren’t evenly spread and are hard to really know in the US. Everybody lies. Operators lie about the size of their reserves, the costs of production, service companies lie about how much something will cost.
You just have to watch what they do, and when they’re laying down rigs and capping wells before they’re completed then that’s a pretty good indicator they’re losing their shirts.
This is why when I am Benevolent Dictator Supreme I will enforce strict pricing and production quotas. $67.50/bbl should get it, tell the E&P companies if you can’t make money on that then it was a ■■■■ project anyway, and that stability will give consumers predictability and costs they can live with. Everybody’s happy!
What’s interesting is that all of the majors and large service companies were already starting layoffs around then, they could see the production glut that was building and knew the price of oil would crater. That was outside of Covid and then KSA and Russia flooding the market which was another shot to the chin for American oil business.