Quote:
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Originally Posted by Wagner
http://money.cnn.com/2008/10/14/news...ion=2008101516
Lord..what is wrong with people and the media? I just don't get it. Maybe I missed my ECON course in college where we were told "if you have the chance to get ahead, don't".
Quick summary:
With oil dropping to $75/bbl it is looking less and less convincing to drill for oil to relieve prices.
WTF?? Do they not comprehend that if you get ahead of the game you do not have to be in the position again? This is not a zero sum event. You don't just do ONE thing, you shotgun multiple areas of interest. I guess the old line "if you don't learn from history you are doomed to repeat it" still rings very true. In the 1980's this was the cry "why develop synthetic fuels when oil is so cheap??"
D U M B @ S S E S
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I guess what they may be alluding to is the profitability margin.
I know the lifting cost has gone from $11/bbl to about $45-60/bbl. Service setor cost has quadrupled, cost of basic well construction material has gone from $5/ft to $30/ft for the case of steel.
So this is the problem, if it drops below a given margin, the oil companies will not be compelled to drill for new reserves.