[IMG]...

https://www.iea.org/oilmarketreport/omrpublic/currentreport/#Demand
From the above, 2014 - global demand 92.4Mb/day, 2015 fct – global demand 93.6 Mb/day.

The cost curve below gives a generalisation of the major supplier groups and their cost of production to cumulatively meet global demand up to sub 90Mb/day (2013) – this suggest the marginal cost of production is 70-80$/bbl, though in reality this is likely higher as I expect the cost curve steepens to meet today’s 92Mb/day.


http://www.financialsense.com/contr...a-shale-mirage-future-crude-oil-supply-crunch

Referencing the chart above, today’s price of 61$/bbl would render the supply covering the last 15Mb/day (Canada Oil Sands, Mexico, US Shale) uneconomic and therefore unsustainable – this supplies ~15% of the global demand.

Calls of the price heading to 50$/bbl, if sustained would knock out Brazil and other Non-Opec and leave supply of 65Mb/day to cater for market demand of 92Mb/day – hardly a market in balance.

Ultimately, while probably overshooting on the downside the oil price could not be sustained below the 80$bbl price for any length of time (months IMO) without causing serious supply issues and a subsequent overshoot in price on the upside when demand is not met.