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With WTI crude oil trading between $83.59 and $86.29 per barrel on Friday, questions about a bear market for commodity prices linger. This morning, Oil & Gas 360® talked to the Baird energy research team about ramifications from this week’s oil price slide.

“Our view is you’re not going to see reductions in activity, capital budgets or drilling programs [at today’s levels]; it’s fairly well hedged for the next few months. All the basins make sense at $80 oil. If it fell to low to mid $70s for a prolonged period, that’s when you’re likely to see producers reconsidering their longer term drilling programs—that’s when people will start rethinking their plans. Breakeven points for the major basins are still below that. Major oil basins like the Permian, Bakken and Eagle Ford are economic at $75,” according to Baird energy research team members in Denver.

Brent traded Friday at $88.11 a barrel in London, the lowest level since December 2010, Bloomberg reported. “The price slump is adding to pressure on Russian assets hurt by sanctions over the conflict in Ukraine. Russia derives about half its budget revenue from oil and natural-gas sales.”

“Trading in options contracts shows a 25 percent chance that West Texas Intermediate crude futures will settle below $77.50 a barrel in mid-December, up from 3 percent at the end of September,” Bloomberg reported.

OPEC released its Monthly Oil Market Report today, reporting that its members increased oil production by 0.40 MMBOPD in September to 30.47 MMBOPD overall, which was the biggest monthly increase in production since November 2011.

“Saudi Arabia and Iran, both OPEC members, are discounting their main crude export grades to Asian buyers by the most in almost six years, prompting speculation that some OPEC nations are competing for market share,” Bloomberg said.

The U.S. Energy Information Administration released its Short Term Energy and Winter Fuels Outlook this week in which the agency predicts total U.S. crude oil production will increase to 8.5 MMBOPD in 2014, up from 7.4 MMBOPD in 2013. The EIA forecasts total U.S. crude oil production will be 9.5 MBBOPD in 2015.

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Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.