Hurry Up and Use More Oil: They’re Running Out of Room to Store It All! (suspect, companies)
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Hurry Up and Use More Oil: They’re Running Out of Room to Store It All! (http://www.twilightearth.com/2009/03/hurry-up-and-use-more-oil-theyre-running-out-of-room-to-store-it-all/ - broken link)
Quote:
The demand for crude oil has dropped dramatically, and now oil producers are sitting on a glut of it, waiting for prices to rise. The storage facilities are running out of room, supertankers are parked offshore with full loads, and investors are left hanging.
More than 30 tankers, rented by oil companies, with capacities of 2 million barrels of oil each, are now simply floating storage tanks. The crews are idle, and the companies have them moored all over the world, just waiting. It’s good business for the owners of the tankers, with rental charges up at $75,000 per day.
I think the economics argument here is a little off kilter. "Sitting on a glut, waiting for prices to rise". From a refiners standpoint, sure, make it cheap, sell it high. But last time I checked, high prices slowed down the purchase of oil/gas. A glut should make prices go down. That's just more evidence that our own companies are screwing our own people.
I think the economics argument here is a little off kilter. "Sitting on a glut, waiting for prices to rise". From a refiners standpoint, sure, make it cheap, sell it high. But last time I checked, high prices slowed down the purchase of oil/gas. A glut should make prices go down. That's just more evidence that our own companies are screwing our own people.
Interesting.
Quote:
Bottom line: oil companies only "develop leases when it is most profitable to do so."
"There are clearly oil and gas resources that are undeveloped in some of the existing leases," said Frank Rusco, with the GAO.
The Department of the Interior estimates 68 billion barrels of oil lie in areas already accessible to drilling in the Gulf of Mexico and Alaska. But today, nearly half of the existing rigs sit idle. Setting the stage, experts insist, for yet another oil crisis when the economy comes back to life.
"I suspect we'll end up having a shock, and a shortage and then the prices will skyrocket," said Matthew Simmons, an energy investment banker.
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