FACTBOX: Ways of looking at the oil price

(Reuters) - After reaching a record high of $147.27 a barrel on July 11, benchmark oil futures fell last week to a 13-month low below $80, nearly 50 percent below the peak.

While the futures price is the most obvious indication of the oil market, there are many other ways of looking at the price.

MARGINAL COST

The marginal cost is how much producers have to pay to extract more difficult oil, such as the oil sands in Canada.

Saudi Arabia's Oil Minister Ali al-Naimi in March put the marginal cost at between $60 and $70 a barrel.

Iran's OPEC governor Mohammad Ali Khatibi said some high-cost oil projects cost $70-$80 a barrel and if the price of oil continued to fall, investors would withdraw from them.

London-based analysts Bernstein also put the marginal cost at around $75-$80 a barrel for oil.

Increasingly, the cost of producing biofuels and nuclear energy is also being taken into consideration.

A study by the Nuclear Energy Agency and the International Energy Agency published in 2005 found nuclear energy was competitive when oil cost $40-$45 a barrel.

Since then oil prices and electricity costs have risen strongly and analysts estimated nuclear power was competitive when oil was at $70 a barrel.

OPERATING COST

The cost of operating fields once they are already onstream has been estimated to be around $50 a barrel.

Goldman Sachs in a report dated October 13 said the oil market could fall to as low as $50, which it believed was "the industry's cash cost and shut in level."

BUDGET ASSUMPTIONS

Oil-producing nations have historically assumed very conservative prices for a barrel of oil when setting budgets, allowing for some slack in their spending should prices fall.

Even though the price of oil has averaged more than $100 this year, the budget assumptions of most OPEC members are based on double-digit prices.

Data from Washington-based PFC Energy showed Saudi Arabia and Iran needing average oil prices at $55 a barrel in 2008 to balance their external accounts. The numbers were higher for Venezuela and Nigeria, at $94 and $68 a barrel respectively.

OIL COMPANY ASSUMPTIONS

Like oil-producing countries, international oil companies also make price assumptions that underpin their production sharing contracts with governments around the world and are used when assessing projects.

Total (TOTF.PA) says it bases its projects on oil at $80 a barrel. BP's (BP.L) oil price assumption is between $60 and $90 a barrel.

FAIR VALUE

Fair value is a notional price taking into account only supply and demand, cutting out any speculative element.

It ignores factors such as the danger of conflict in oil-producing nations, currency effects and fund flows in and out of oil.

Estimates of what is the fair value of oil abound, but some players have said a fair price would be closer to $75 a barrel.

Ministers of the Organization of the Petroleum Exporting Countries have repeatedly said prices were inflated by speculation and that the price slide from the July record in part reflected the departure of speculators.

INFLATION-ADJUSTED

In inflation-adjusted terms, July's record price was well above the previous record high of $105.95 set in April 1980, after the Iranian Revolution in 1979.

That level was first breached in March 2008, according to the International Energy Agency (IEA). It bases its calculation on monthly prompt U.S. crude and U.S. consumer price data as U.S. futures trade did not exist in 1980.

BENCHMARK

The price of U.S. light sweet crude is a benchmark used for pricing other crudes. North Sea Brent futures are also a marker.

The most expensive crudes in the world, notably Nigeria's Pennington or Malaysian Tapis, command a strong premium to the benchmarks as they have low sulphur content, making them easy to refine to produce high yields of gasoline and other light fuels.

At the other end of the scale, heavy Iranian crudes Soroush and Norouz are sold at steep discounts to Brent crude.

(Compiled by Barbara Lewis and Simon Webb)