THE BURNED OVER DISTRICT

And that is to stop the spread of fracking. To frack costs money, lots of money and that makes it worthwhile only while the price of oil is above a certain level. And the current price of oil has been dropping to that level and soon below.

Oil prices continued to collapse Monday and are getting closer to levels that could dampen the U.S. energy boom.

West Texas Intermediate crude, the U.S. benchmark, traded below $85 a barrel on Monday and has plummeted by more than 20 percent from this summer.

Raymond James energy analyst Pavel Molchanov said he thinks a drop into the $70 to $80 range could start triggering meaningful cutbacks in investment in U.S. production.

“I think there will be some spending reductions even now simply because companies are going to generate less cash flow at $85 a barrel than they did at $105,” Molchanov said. “But as far as a significant amount of more meaningful curtailment in activity, we’re not there yet.”

The U.S. is producing more crude oil than it has in nearly 30 years. Production is forecast to reach 9.5 million barrels a day next year, which would be the most since 1970, according to the U.S. Energy Information Administration.

The boom is a result of drilling shale rocks through the techniques of fracking and horizontal drilling, and the question is how high oil prices need to be in order to make it profitable.

The surging U.S. production is one of the reasons behind the worldwide oil price drop. Other factors include a weakening global demand for oil and the increase in Libyan oil drilling over the summer (the troubled nation managed to boost its output from 200,000 barrels a day to 900,000 by the end of September), according to EIA analyst Michael Leahy.

Leahy attributed weakening oil demand to lower than expected economic growth in Asia, especially China, and declines and stagnation in European countries.

Jamie Webster, senior director at the global energy consulting firm IHS, said he thinks that American oil producers can sustain a price drop to $80 a barrel for six months or so before making substantial cuts.

But no one is sure how companies will react, he said, because the shale boom is fairly new and the U.S. producers haven’t been tested in a sustained time of lower prices.

That leaves them with a curious choice, when the more oil they recover, the less they can afford it. Which way will they go?