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How do Bakken oil prices compare to those of its competitors?

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Quick Answer

Bakken oil competes on the oil exchange market in the same way as oil from other sources, so its price reflects market pricing depending on the grade of the final product. However, costs for extracting oil from the Bakken shale make production much more expensive than other sources of oil.

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Full Answer

Extracting usable crude oil from shale deposits like the Bakken shale is a very expensive process due to its complexity, as reported by science and technology site HowStuffWorks. Oil shale is extracted from the ground using mining techniques, then subjected to a process known as pyrolysis. This involves heating the oil shale to high temperatures of 700 degrees Fahrenheit in an environment lacking oxygen, allowing the oil in the shale to emerge. While some advanced extraction techniques avoid the need for extensive mining, the process is still more expensive than drilling for oil on a per-barrel basis.

Due to these high extraction costs, the economic viability of production of Bakken oil from shale is highly dependent on the market price for crude oil. Economists familiar with the field estimate that oil prices of at least $61 per barrel as of 2015 are necessary to make extraction of oil from the Bakken shale profitable.

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