Even after a massive plunge in oil prices, which have dropped more than 50% in less than six months, analysts are saying that it won't be enough to put much of the US oil industry out of business.

Goldman Sachs researchers say that oil prices would have to drop to $40 per barrel for six months, down another 15% from their current level, to "keep capital sidelined." That's the level at which Goldman says high-yield defaults might start.

The prices are already starting to hit some of the more expensive extraction companies:

The more credit intensive companies are already in maintenance mode where cash is being reserved for maintaining fields only. We now expect US supply growth to slow to 400,000 barrels per day, year on year by the 4th quarter of 2015.

However, most aren't in this position yet, and it'll take some time before they are:

To keep all capital sidelined and curtail investment in shale until the market has rebalanced, we believe prices need to stay lower for longer. As short cycle shale production is a 12 month investment proposition, producers typically hedge out 9 to 12 months.

In short, this means that it's not the spot price, but the price over about a year that is relevant to most producers. The energy minister of United Arab Emirates, one of the countries hoping to retake market share and squeeze out domestic US oil, has actually referenced the fact that prices will have to be held low while the companies are still hedged.

Despite the massive drop in prices, most non-OPEC producers are still cost effective at a much lower price. Non-OPEC oil sources produced 56.55 million barrels of oil per day in 2014. About half of this has an operating cost of less than $20 a barrel.

Goldman Sachs, Business Insider



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