Steep discounts and a global supply glut pushed shale crude prices in Bakken below $50 a barrel last month, a new report by Plains All American said.
Plains said crude sold at the wellhead in Bakken, North Dakota slumped to $49.86 per barrel on November 28 and barely rose above $50 per barrel on December 3.
With Brent prices dropping nearly 40 percent since June and global demand flagging discounts at the wellhead have dragged shale crude prices down across the United States.
Crude from Colorado’s Niobrara shale hit $54.55 Wednesday while Eagle Ford crude stood at $63.25 and oil from Oklahoma’s panhandle reached $58.25.
Analysts are concerned low prices will make it difficult for projects to break even.
“To a producer in Wyoming, if Brent’s $70 then I’m at $50, then I have to start asking does it economically make sense to keep drilling,” executive VP at Dallas-based Turner Mason & Co John Auers said.
A lack of transportation infrastructure is also depressing shale crude prices as refiners choose imported crude delivered closer to their facilities and transportation costs eat into producer’s profit margins.
Prices for shale crude are expected to rise as pipeline capacity in Bakken jumps from 583,000 to 773,000 by the end of the year, North Dakota’s Pipeline Authority said.