TB, a recent discovery of Oil is south of the southern US states in the ocean, and it will likely take 5 years to develop it. It will be one of the deepest wells in the world. Oil is currently cheap, as cheap as say - a disposable plastic fork.
I heard about this field in the Gulf over a year ago. I've been gob smacked at how it's being portrayed as some sort of "just discovered" field.
There's billions of barrels more in the area...of course you and I wont hear about that just yet. :-)
Still, even if there is no end to the amount of oil (think about it, do you really think there was enough biomass to support the vast 'fossil' fuel reserves?) lifting costs are as important as absolute quantity.
True, but at $68 a barrel thats still a HUGE profit!
I do believe oil at a Saudi well head is around $3-$6 a barrel...probably less. I heard back in the late eighties it was just over 50c a barrel at the well head production cost.
In Russia there oil is "sludgy" and of low quality and yet they pump that muck out from deep down at a profit even when a barrel of oil was at $12 a barrel.
Russia BTW is rebuilding there economy at a vast pace with the high price per barrel. Both them and Iran have a HUGE vested interest in keeping the price high by provoking confrontation in the M.E...as does the U.S of course where ALL those petro dollars from the Sheikdoms get invested...not forgetting the City Of London banking establishments either. :-)