Oil is below $35. Here's what that means for US producers

A drilling crew member on an oil rig in the Permian Basin near Wink, Texas. 
Nick Oxford | Reuters

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As oil prices plummet, the health of the U.S. shale industry hangs in the balance.

Highly leveraged energy companies require a certain price per barrel in order to breakeven, and as oil prices stay suppressed, a wave of consolidation or bankruptcies could be on the horizon.

On Monday U.S. West Texas Intermediate crude plunged nearly 30% at the low to trade at $27.34, before recovering somewhat to hover around $34.21 per barrel. The steep sell-off comes as relations between Saudi Arabia and Russia sour, prompting fears of an imminent price war.