Elizabeth, Three points worth remembering on the industry- $15/bbl is the internal price that most major energy companies run their economics on e&p projects. Thus when crude oil gets back to $15/bbl, expect energy companies to table more exploratory and in field development projects once again.
Second there has been OPEC overcapacity since 1983, and that overcapacity will be there into the 2000's. So some market discipline by OPEC producers has been and will be necessary for the oil markets into the early 2,000's.
Third gas markets are regional unlike oil (hard to transport gas compared to oil!) , which is truly a world market. So gas prices are delinked to a certain degree from oil...
Once Asian demand returns,with significant move to free market economies in Africa, Asia, and Latin America countries, watch energy demand really crank up. It's the "MTV syndrome". Worldwide everyone watches MTV and wants to be like the Americans- and that means increased consumerism.
My officemate even went into a remote drill site in the Peruvian jungles recently, and the drill crew had a satellite dish set up and were watching MTV- along with the local Indians! Amazonia meets "Headbangers Ball"??? (Jacque Cousteau must be rolling in his grave, ha!) And to top it off the drill crew had given the locals free Dallas Cowboy t-shirts which they were all sporting. Even weirder yet you occassionally run into Indians wearing old Nazi paraphernialia made into jewelry, necklaces and earrings. You just wonder how that got there...
BTW are you familiar with the proper way to carry, well, your "family jewels" in the Andean jungles? The proper local method is to use a thong to tie it, well pointing upward. The locals are quite shocked and embarassed to see naked westerners who, well let it hang downward naturally....Just not proper per local customs! So guys take a leather thong along with you if you visit backbasin Amazonia......
Sincerely,
Doug F. |
