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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (39120)	3/6/1999 6:12:00 PM
From: Brent Hogenson	Respond to of 95453

First, let me say that I am way too long in Oil so I'm not exactly happy with what the article says. However, in a free economy ( no OPEC price supports ) oil prices would drop to the cheapest cost to produce the last barrel needed. For example, if the world needed 75 million barrels per day and producers costs and ability to produce were: country A - 50 million barrels per day @ $2 country B - 20 million barrels per day @ $5 country C - 10 million barrels per day @ $8 country D - 15 million barrels per day @ $12 The price of oil would be $8 a barrel, country C would only be able to produce 5 million per day and country D's oil business would go under. I realize that things are not that simple but the market has a way of becoming efficient.