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Politics : Ask Michael Burke

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To: lorrie coey who wrote (73953)	1/18/2000 4:22:00 PM
From: Tommaso	Read Replies (1) of 132070

The lifting costs and other expenses of oil producers stay about the same, so that when the price of crude rises, the net income multiplies much faster. If it costs $8 a barrel to produce oil that sells for $12, you get $4 profit, but at $24 you get $16 a barrel profit. And at $30 a barrel, which spot WTI is approaching, you get $22 profit, a 550% increase over what you get when it's $12 a barrel. And a lot of this is tax free because of oil depletion allowances. But it's easy to pick the wrong trusts and the wrong time to get into them--just like everything else.

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