Permian Oil Is Selling for Less Than a Discount Steak in Midland

(Bloomberg) -- Crude sold in the world’s largest oil field has gotten so cheap, you can buy a barrel for less than the cost of a meal at Outback Steakhouse.

As Saudi Arabia and Russia prepare to ramp up production in an increasingly acrimonious war over market share, West Texas Intermediate crude in Midland, Texas, tumbled the most in three decades. The grade, pumped in the heart of the Permian Basin, traded as low as $16.24 on Wednesday, the weakest level since 1999. That’s less than the cost of a ribeye at Midland’s local Outback restaurant.

The price plunge comes as crude futures in New York tumbled 24% and global market Brent closed below $25 a barrel for the first time since 2003. If the U.S. benchmark stays around $20, “cash operating costs will not be covered,” said ESAI Energy shale analyst Elisabeth Murphy. “We could see US shale at 1 million barrels a day lower at the end of the year easily if this current price holds.”

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