Tuesday, April 05, 2005

Anyone Starting to Sweat Over Oil?

Oil prices keep creeping up and up, breaking the 58 buck a barrel barrier just a few days ago. If you missed it, that radical institution, Goldman Sachs investment bank, predicted oil prices could go over $100 in the not too distant future. Why? Instability in the Middle East, especially Saudi Arabia, where an al-Qaida problem is blossoming quite nicely and growing world demand especially in India and China, which recently overtook Japan as the number two user of oil after the U.S. Just imagine what a gallon of gas will cost then. What will all those downtrodden SUV and pickup drivers do? Funny how car ads these days make nary a mention of how many miles a gallon such-and-such a car gets. It wasn't all that long ago.... well it was long ago... after the 1973 oil crisis... that cars were shrinking, mileage was going up, and all the ads played up the miles per gallon prominently. Those days are long gone. Cars are getting bigger and bigger as world oil supplies shrink and shrink. Oh, here we go again, more malarkey about the coming end of oil. The oil is not about to dry up in Saudi Arabia, or elsewhere, but it's not as abundant as it once was and that doesn't mean problems are just around the corner. In a shocking first, 2003 was the first year that no major oil fields were discovered anywhere around the globe. Nadda, none! U.S. oil peaked in the 1970s, North Sea oil peaked in the 1990s, Caspian Oil will not live up to all the hype. Companies are backing out of projects there. However, oil companies are pumping up their reserves. Not by pumping out more black gold from the ground, but by buying up the reserves of other oil companies! Less money is being sunk into exploration. Why? The companies are not putting their money where the oil is not. And more and more, they don't think it's worth the money to drill for oil, which is harder and harder to find, and deeper, as well, making it more costly to get out. What happens if oil goes over $100. Can you say four dollars a gallon.... depression.... end of cushy life as we know it....

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