Archived material Access restricted Article
Rantburg

Today's Front Page   View All of Sun 09/17/2006 View Sat 09/16/2006 View Fri 09/15/2006 View Thu 09/14/2006 View Wed 09/13/2006 View Tue 09/12/2006 View Mon 09/11/2006
1
2006-09-17 Home Front Economy
Oil's slide toward $62 to test OPEC resolve
Archived material is restricted to Rantburg regulars and members. If you need access email fred.pruitt=at=gmail.com with your nick to be added to the members list. There is no charge to join Rantburg as a member.
Posted by Steve White 2006-09-17 00:00|| || Front Page|| [1 views since 2007-05-07]  Top

#1 I heard some economist claim that oil prices were dropping due to Bernanke raising interest rates. Which is, of course, absurd. I suspect it's due to more to projections of adequate supplies, the markets current measure of the risk of supply disruption, and Chevron's discover of a massive new field in the Gulf of Mexico.

Hate to sound like Al Gore (I REALLY would hate that). But high prices for a while could be a good thing. It will encourage more exploration (maybe even finally drilling in ANWR and off the coasts), looking at alternatives to oil - not just ethanol, but increased production of the Athabasca tar sands, and western oil shale. And perhaps more conservation.
Posted by DMFD 2006-09-17 00:36||   2006-09-17 00:36|| Front Page Top

#2 Chevron did not discover a massive new field. What they did do is prove that an older layer of rock than has been previously drilled out there is capable of holding and producing oil. They found one decent-sized field and improved the odds that there are a whole string of decent-sized fields in the area.
Posted by Glenmore">Glenmore  2006-09-17 00:42||   2006-09-17 00:42|| Front Page Top

#3 I think I actually put in a comment at this site which called this decline in oil prices. As I recollect, a key would be a quiet hurricane season in the Gulf of Mx.

However, the hurricane season isn't over yet.
Posted by mhw 2006-09-17 00:43||   2006-09-17 00:43|| Front Page Top

#4 Glenmore, I saw reports (for instance this one from the "Toronto Star") - "the announcement earlier in September by a Chevron-led consortium about a major oil discovery in the Gulf of Mexico that could boost U.S. oil reserves by 50 per cent".

Of course, given the shoddy state of journalism today - reports could be wrong. Where'd you read that it was not a major new find?
Posted by DMFD 2006-09-17 00:52||   2006-09-17 00:52|| Front Page Top

#5 The Wall Street Journal cited Chevron officials as estimating recent discoveries in the Gulf of Mexico could hold as much as 15 billion barrels of oil and gas reserves. That would boost U.S. current reserves by 50 percent.

Link

Posted by phil_b 2006-09-17 01:04||   2006-09-17 01:04|| Front Page Top

#6 Earliest date of GoM oil impact is 2010
Posted by Captain America 2006-09-17 01:08||   2006-09-17 01:08|| Front Page Top

#7 large oil future gamblers pushed up a portion of the recent oil price record highs, I imagine a few have taken a beating since the adjustment.

It wouldn't surprise me if the Dinner-Jacket© and Crew played the markets around his "Shut the Gulf Down" threats.
Posted by RD 2006-09-17 01:51||   2006-09-17 01:51|| Front Page Top

#8 There is nothing more to markets than buyers and sellers. But they have minds and they use them. When it's a seller's market, buyers can shop around all they want, but they won't beat the seller down, they'll just watch the price go up. so they learn to buy quickly and maybe add a little to the bid to make sure they get the deal.

Then, all of a sudden, there's more sellers than buyers. And they buyers know they can go from seller to seller and get them competing with one another to drive the price down. And the longer they can go without buying the lower the price will go.

You've probably seen it if you've watched the housing market. When markets are hot, you get 25 offers on a house. When they're not, they can sit on the market for a year without someone going through. Or gasoline prices; when the price is rising, keep the tank full, when it's falling, drive till the warning light comes on. The mental attitude buyers and sellers bring to the transaction is the market psychology.
Posted by Nimble Spemble 2006-09-17 03:21||   2006-09-17 03:21|| Front Page Top

#9 ...OPEC is as addicted to its money as a heroin addict is to his smack - the cheating (ESPECIALLY from those paragons of virtue the Venezulelans and the Iranians) will be massive and widespread. And don't forget that we have about a quarter-million BPD reserve coming back on line in Prudhoe Bay in a couple months, which will take a real whack at any production cuts.

Mike
Posted by Mike Kozlowski 2006-09-17 08:14||   2006-09-17 08:14|| Front Page Top

#10 DMFD - I work in the business. It is a very IMPORTANT discovery, but by itself merely demonstrates more potential for big reserves. If you read the WSJ article carefully you'll see the words 'estimating', 'discoveries', and 'could hold.' If you look at the stock prices you'll see Chevron stock has not risen relative to the other oil companies.
Posted by Glenmore">Glenmore  2006-09-17 08:49||   2006-09-17 08:49|| Front Page Top

#11 All we need is a federal law that prohibits anyone at the stock exchange from bidding over $40 for a barrel of oil. See what happens to their little cartel then, when the worlds largest consumer refuses to get buggered.
Posted by bigjim-ky 2006-09-17 09:14||   2006-09-17 09:14|| Front Page Top

#12 Nope, they'd just buy and sell under the table.

Can't control the free market, it's too slippery.
Posted by Redneck Jim 2006-09-17 11:19||   2006-09-17 11:19|| Front Page Top

#13 And don't forget that we have about a quarter-million BPD reserve coming back on line in Prudhoe Bay in a couple months, which will take a real whack at any production cuts.
The Thunder Horse platform in the Gulf should be back in business about the same time.
Posted by 6 2006-09-17 11:41||   2006-09-17 11:41|| Front Page Top

#14 Sounds very good, take away the Saudi's Oil Weapon.
Posted by Redneck Jim 2006-09-17 12:10||   2006-09-17 12:10|| Front Page Top

#15 All we need is a federal law that prohibits anyone at the stock exchange from bidding over $40 for a barrel of oil. See what happens to their little cartel then, when the worlds largest consumer refuses to get buggered.

Well, when the price goes up, you'll see either lots of oil leaving the US to the places paying more than $ 40/barrel, and none coming in, thus resulting in massive shortages... OR, if exports are banned, no oil coming in besides what the US produces, which right now is only 40% of what it uses.

We buy 60% of our oil mainly from foreign governments in a known, operating-in-the-open cartel and you're going to blame the price of oil on "wall street traders?"
Posted by Abdominal Snowman 2006-09-17 14:39||   2006-09-17 14:39|| Front Page Top

#16 OH, and Venezuela has abused its own reservoir management and production reinvestment so badly that it has to import oil from Russia to fulfill its contracts.

It's also producing about a third _less_ oil than its allowed OPEC production quota, and lying about it. So I don't think there's going to be any "help" coming from that quarter.
Posted by Abdominal Snowman 2006-09-17 14:41||   2006-09-17 14:41|| Front Page Top

23:59 JosephMendiola
23:43 JosephMendiola
23:37 Super Hose
23:30 JosephMendiola
23:29 Super Hose
23:25 JosephMendiola
23:22 Super Hose
23:18 JosephMendiola
23:16 Super Hose
23:05 Same as last time
23:03 TMH
23:03 Super Hose
22:55 USN,Ret
22:50 trailing wife
22:50 Super Hose
22:47 Old Patriot
22:39 Super Hose
22:34 trailing wife
22:18 Cleaque Omavimble7481
22:00 Old Patriot
21:42 RWV
21:39 3dc
21:32 Penguin
21:26 Penguin









Paypal:
Google
Search WWW Search rantburg.com