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Sand prices threaten oil companies profits

Thursday, March 30, 2017 by

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The cost of sand is increasing, while the U.S. oil industry rebounds. As key ingredient used in hydraulic fracturing, sand is crucial to oil production. According to The Wall Street Journal, it’s rising price threatens to cut into energy companies’ profits.

With crude oil selling for just under $50 a barrel, American shale operations have been rushing back into the oil fields. They have been using more sand to supersize their wells as drilling technology continues to advance. However, the increased demand has caused an increase in sand prices and diminished energy companies’ profits.

The rigid market has already pushed prices to an estimated $40, which is up from $15 to $20 in the second half of 2016. Some have predicted the growing demand for sand may surpass supply by next year, creating a shortage that could last for most of 2018.

Learn more: The Wall Street Journal > Latest threat to U.S. oil drillers: The rocketing price of sand

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Farm and Dairy, a weekly newspaper located in Salem, Ohio, has been reporting on topics that interest farmers and landowners since 1914. Through the Shale Gas Reporter, we are dedicated to giving our readers unbiased and reliable information on shale gas development.

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