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Politics : Foreign Affairs Discussion Group

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To: zonder who wrote (53843)	10/22/2002 9:09:34 AM
From: John Carragher	Read Replies (3) of 281500

I believe you are being very optimistic in $17 bbl... first we do not want to see Saudi and the other opec nations collapse. It would not be in our interest.. Second, integrated oil companies get their profits from more the than the cost of a barrel of oil.. Yes, exploration and producing would get hurt in selling lower cost crude from their own wells or long term contracts.. On the other hand.. lower crude would be great for increasing world demand.. Hence refineries would be running at maximum capacity and marketing would be out full ... These two groups imo would more than offset any losses in the reduction of a barrel of oil... Been there done that.. John ps did you know a major oil corp back in the 70's honored their long term contracts with Saudi and paid a premium and sucked up the difference in loss to maintain consistent supplies. Balance of oil is very complex situation. If you think IRaq. oil and our getting control over the oil fields is going to drop oil to $17. I can assume you under estimate the operators of these fields...

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