Posted on 12/05/2005 4:28:23 PM PST by Born Conservative
NEW YORK Hold on to your gas guzzlers: Cheap oil may once again be just around the corner. Even as consumers worry about high gasoline prices and rising heating bills, oil executives in London, Texas and Saudi Arabia seem to be concerned about a prospect of falling oil prices.
In a recent speech in Singapore, John Browne, the chief executive of BP, spoke of a possible sharp drop in prices and called current levels "unsustainably high."
John Hofmeister, head of Shell Oil in the United States, said during an interview, "This high price cycle is artificially inflated."
The notion of a steep falloff in energy prices may seem far-fetched.
After all, in the past year, the market has experienced crude oil prices that touched $70 a barrel; huge disruptions in the Gulf of Mexico; strong demand from the United States and from the world's fastest-growing market, China; continuing problems in producing Iraqi oil for export; and mounting tensions with Iran, a large OPEC exporter.
If anything, most of those situations would point to a sustained period of high energy prices. Most analysts said they expected crude oil prices to remain above $40 a barrel for the foreseeable future.
But the oil business has witnessed a succession of booms and busts, and oil companies have found it impossible to balance their future production with the world's need for oil. Too much capacity, and prices fall; too little, and they rise.
Today, producers are again under pressure to step up production and refining, and to increase investments to get more oil to the markets quickly. But oil executives and government ministers are concerned that if demand slowed down, even a little bit, those investments might create a large oversupply in two to three years, pushing prices down again.
(Excerpt) Read more at iht.com ...
I see it as both.
Could it be that Saddam's oil is beginning to flow freely and these that made secret deals with Saddam for 'cheap' oil are forced to compete with the "free" flow of oil???
In high school I earned $1.15 hr at the A&W, while paying 25-30¢ for a gallon of gas. So, my before tax pay would buy 3-4 gallons of gas. 'course I paid 35¢ for a pack of smokes.
He might have added that this was before the U.S. interstate highway system was built and sport utility vehicles became the vehicle of choice
Geez, these dim bulbs are obsessed with SUVs. It's an obsession that borders upon pathological, and disables them from any rational discourse on the subject.
I was in the petroleum business for years and have some economic background. Reading the "experts" on threads such as this gives me a headache.
Can you say pyramid scheme? Can you say snake oil?
Antoninus: The message of the parable of the boy who cried "wolf" is not that there are no wolves.
Unless you believe in an infinite supply of oil [on a finite Earth] there is a limit. Whether it is this year or in fifty years [ergo not a short term constraint] is something that I do not believe is generally known. If Saudi Arabia has the goods, or if there is another Saudi Arabia out there just waiting to be discovered you may very well be correct.
On the other hand if Saudi Arabia is not as advertised we may already be the peak. I have an opinion, but will freely admit that I do not know. Do you know and if so how?
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