NEW YORK, Nov. 28 (UPI) -- The U.S. benchmark price for crude oil fell below what some analysts see as the break-even price for shale, one day after OPEC's decision to keep output steady.
West Texas Intermediate shed more than $4 per barrel for the January contract in early Friday trading, adding to dramatic losses for the U.S. benchmark that greeted a Thursday decision from members of the Organization of Petroleum Exporting Countries to keep production levels static.
Oil prices are at a four-year low and down more than 25 percent from their mid-summer levels. The decline in price is in part related to slow economic recovery and an increase in oil production from U.S. shale.
"It is important to recognize that if the recent price trend continues, the long-term sustainability of capacity expansion plans and investment projects may be put at risk," Libyan Deputy Prime Minister Abdourhman Ataher al-Ahirish said at the start of the Thursday conference.
The break-even price for OPEC members varies widely, though most are above the $100 per barrel mark. OPEC at the conclusion of Thursday's meeting decided to keep the production level static at 30 million barrels per day, saying market stability was needed to ensure producers receive a "decent income" and further economic strains are avoided.
OPEC's decision was seen by some in the industry as a sign the 12-member production group was putting pressure on a capital-intensive U.S. shale industry upsetting market dynamics.
One day before OPEC's meeting in Vienna, the U.S. Energy Information Administration said even though WTI prices are at historic lows, its survey of 30 publicly traded companies found improved financial results despite the bear market for crude oil.
Analysis from Wood Mackenzie, meanwhile, finds most U.S. producers should be able to adapt to a lower price environment. Its analysis says prices near $70 for WTI are a threshold level for shale, though the slump is "so far not a material threat to U.S. tight oil or the industries that surround it."
Brent and the 12 crude oil blends that make up the OPEC basket suffered heavy losses Friday, suggesting it's not just U.S. producers feeling the pain. Some non-Arab OPEC members walked away from Thursday's meeting frustrated with their Middle East counterparts.
The poles of economic demand, however, are shifting away from the West and toward the Asia-Pacific, where growth is, in some cases, twice that of the United States. OPEC said it was letting the free market keep things in check, as most analysts expected some modest, but healthy, economic growth through 2015.
Demand should increase in response, suggesting the slump in oil prices may be relatively short lived.