By Alan Neuhauser
Don’t look now, but oil prices are on an upswing.
Brent crude oil, a benchmark for global prices, broke through $50 earlier this week, hovering above $51 as of late Thursday morning – its highest point since last July.
A range of U.S. drillers, analysts and industry insiders have named $50 a break-even point for shale oil and gas companies, whose hydraulic fracturing and horizontal drilling techniques are generally more expensive than conventional drilling. Hundreds of drilling rigs were forced offline after prices began plummeting in June 2014, putting some 80,000 Americans out of work as a flood of U.S. supply met non-stop production in Saudi Arabia and anemic demand in Asia, causing prices to tumble.
“If we see sustained $50 or $50-plus oil over a period of several months, I think you will see a lot of operators getting back to work,” Sam Ori, executive director of the Energy Policy Institute at the University of Chicago, said in an interview last week as prices crept toward that threshold.
But, he added, “the key word is sustained.”
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