To: American Spirit who wrote (176303 ) 8/31/2001 4:30:45 PM From: Brumar89 Read Replies (1) | Respond to Well, can't resist again. Here's an alternative view by a little outfit called the Department of Energy:eia.doe.gov World oil prices declined sharply in late 1997, and remained extremely low through 1998 and into early 1999. Over the past 2 years, however, following a series of OPEC oil production cuts (particularly the organization's March 23, 1999 agreement to cut oil production by 1.7 million barrels per day -- bbl/d), oil prices have rebounded sharply from their lowest levels in decades . . .In many ways, the current world oil price spike is the direct result of the preceding price collapse. For one thing, the price collapse of 1998 led to a large number of well closures (as well as a reduction in oil exploration and production) in non-OPEC countries, including the United States, where thousands of so-called "stripper" wells, for instance, were shut down in Oklahoma and Texas. The price collapse also tended to stimulate oil demand, and to reduce investment in new oil exploration and production. eia.doe.gov Non-OPEC production is especially susceptible to price collapses, as non-OPEC production costs tend to be relatively high. Effects of the oil price collapse of 1998 remain evident in the global oil industry. Historically low prices resulted in decreased exploration and delays in bringing new production onstream. The sharp increase in oil prices in 2000 is partially explained by the slowing non-OPEC exploration and production activity during the 1998 price collapse.
