It is quite obvious that high oil prices in the last 3-4 years have reduced demand for oil, as shown in this IEA graph for OECD countries: So which oil is affordable? Let’s use a graph of the Monetary Policy Report (January 2015) of the Bank of Canada (which would be favourable to Canadian tar sands) Fig 3: Oil production by area and full-cycle costs The Bank of Canada report reads: “Based on recent estimates of production costs, roughly one-third of current production could be uneconomical if prices stay around US$60, notably high-cost production in the United States, Canada, Brazil and Mexico (Chart 4). More than two-thirds of the expected increase in the world oil supply would similarly be uneconomical. A decline in private and public investment in […]