“Half of the current producers have no legitimate right to be in a business where the price forecast even in a recovery is going to be between, say, $50, $60. They need $70 oil to survive,” he told CNBC.

Even the big boys are taking a hit.

Last week, BHP Billiton was forced to writedown the value of its U.S. oil and gas assets by $US7.2 billion (Aus$10.4bn), admitting it needed $US60 a barrel oil to be “cashflow positive.”

But the reality is that under $30 dollar a barrel, it is only a matter of time before we see a range of bankruptcies in the shale industry.

“At this price range, nothing is safe,” says Jesse Thompson, an economist at the Federal Reserve Bank of Dallas. And he could well be proved right.