Posted on 01/02/2008 10:53:22 AM PST by kellynla
NEW YORK (CNNMoney.com) -- Greed is driving oil prices to $100 a barrel.
That's a common feeling among the general public, which sees record profits for investment banks that bet on oil prices - making wealthy oil companies even wealthier - while drivers shell out $3 and more for a gallon of gas.
It's also a common refrain from OPEC states. Having to defend themselves against charges their production quotas are responsible for the high prices, they point to near-average crude oil supplies and say speculation is what's behind the frenzy.
But industry experts offer mixed opinions on speculative investment's impact on oil prices. Some say it's marginal, that strong demand and limited supply are the real reasons oil prices have risen five-fold since 2002, and say additional investors actually benefit the market by adding more liquidity.
Others say the tight supply and demand situation has been known for a while, and nothing but speculation is behind the doubling of oil prices over the last year. They say there is a cost to the sheer number of oil contracts now traded on the oil exchanges, and this trading has just enriched Wall Streeters at the expense of average Americans.
The Energy Information Administration, the Energy Department's independent statistical and analysis arm, thinks strong demand and limited supply - otherwise knows as "the fundamentals" - is why oil is so pricey.
"Our view is that the market is tighter [than last year]," said Doug MacIntyre, senior oil market analyst at EIA. "We don't have the inventories now."
(Excerpt) Read more at money.cnn.com ...
My guess is $hit.
The only speculation is that most will have little problem buying gas made from $100.00 oil.
email Congress for a full court press to uncap the thousands of domestic oil wells and start drilling new ones on and offshore - pronto!!!
the mere thought of the US getting serious will have positive results.
Bubble Oil?
Do you agree with the article?
Better yet, what potentially productive wells can be uncapped?
A always as the new blood floods into the trading of this commodity in the hopes of a sure killing, the old pros will back out, selling their contracts which have already been run up by the newbies. Like any Ponzi scheme, when the traders left realize they have no one willing to buy at a higher price, as the realization of a slowing world economy sets in, the blood will run as traders dump, for whatever they can get, their rapidly becoming worthless futures
contracts.
I make no predictions as to when but only that it will happen. Oil will again be below $40.00bbl when the dust settles.
We are also far past the price at which shale oil deposits are developed cost effectively.I believe that price is $65 bbl.
The point is for the US to get out there and shake the bushes. Don’t sit around waiting for OPEC to show favor and reduce a obscenely high priced product dearly needed by the west - you know how they love us so much!
You are right in that most oil is not extracted from a well head and is capped when the production rate depletes. However, Congress is not stopping these wells from being reworked.
I guess someone will be having a prosperious New Year. The little people will have to work harder...haha.
(Better yet, what potentially productive wells can be uncapped?)
These wells were all shut down over the last 25
years because they were not making enough money.
Now Denbury is building a CO2 plant and plans to
inject the CO2 into the wells and force the oil
to the surface. At $20\bbl this wasn’t feaseable
at $100\bbl they are going back to these capped wells.
http://findarticles.com/p/articles/mi_m0EIN/is_2005_Nov_22/ai_n15865344
Denbury Resources Agrees to Acquire $250 Million of Additional Producing and Tertiary Oil Properties
Business Wire, Nov 22, 2005
DALLAS — Denbury Resources Inc. (NYSE:DNR) (”Denbury” or the “Company”) today announced that it has entered into an agreement to acquire oil properties located in Mississippi and Alabama for $250 million. The acquisition is expected to close in late January 2006 and is subject to satisfactory completion of the Company’s examination of the environmental condition of the properties and its title examination.
—The acquisition includes purchase of controlling interests in three fields: Tinsley Field approximately 40 miles northwest of Jackson, Mississippi; Citronelle Field in Southwest Alabama; and the smaller South Cypress Creek Field near the Company’s Eucutta Field in Eastern Mississippi.
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—All three fields are potential carbon dioxide (”CO2”) tertiary flood candidates. The Company initially has estimated that these fields have aggregate reserve potential from CO2 tertiary floods of approximately 60 to 75 million barrels of oil equivalent (”MMBOE”) net to the interest to be acquired. This reserve potential increases to approximately 70 to 85 MMBOE by including the Company’s existing interest in Tinsley Field.
—The Company has recently acquired interests at Tinsley Field from other third parties and is continuing to seek additional interests in this field. The Company has initially estimated that this field has aggregate reserve potential from CO2 tertiary floods of approximately 30 to 40 MMBOE net to the interest to be acquired. This reserve potential increases to approximately 40 to 50 MMBOE by including the Company’s existing interest in the field.
It is not greed, it is demand.
One of the first rigs I worked on was a shallow water off shore platform in the Gulf of Mexico which was first drilled in the 1950’s capped in the 1960’s and brought back into production in the 1990’s. You drill it again and inject to bring these back into production.
There is lots of that going on and has been for a while.
!!!
You posted this
“(Better yet, what potentially productive wells can be uncapped?)”
I was just showing the ones that I know about
because I live about 1.5 miles from Denbury’s
CO2 plant, that should go online sometime this
spring.
Yeah...”speculators.” Let’s keep telling ourselves that. LOL! The time of truth will probably come in June.
...better start cranking up the domestic manufacturing.
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