But what most catches the eye is that the market seems to have put a floor under the crude price. WTI has at no point dropped below $65 per barrel since 2021 (see the chart below). That’s probably not a coincidence. Longview Economics’ Harry Colvin suggests this is the floor price because it’s the average breakeven production cost for US shale drillers.
If the administration isn’t happy with prices in this range and wants to force them lower, it will need to find a way to compensate investors to produce oil at what appears to be below their average breakeven cost:
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