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But in 2014, oil prices have been crashing, with the price for West Texas Intermediate crude falling from $100 per barrel in July to below $70 in early December. That's partly because there's so much new oil coming out of the US and Canada, and partly because demand in Europe and Asia is weakening.
So now everyone's asking: If high prices helped create the oil boom in the US and Canada, will falling prices throttle it?
ANALYSTS OFTEN FOCUS ON A METRIC CALLED THE "BREAKEVEN" PRICE
This turns out to be a surprisingly tricky question. Yes, most everyone agrees that falling prices will constrain US and Canadian oil production to some extent. The International Energy Agency (IEA) has forecast that US shale production will grow more slowly if current prices persist (though the agency still expects output to rise another 955,000 barrels per day in 2015). But estimates of the exact impact can vary widely. Saudi Arabia is predicting — and hoping — that the US boom will largely fizzle out at these prices. Other onlookers think drillers will remain surprisingly resilient..................
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