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In the past 6 years (since 2000), suppliers have had all the incentives to produce more, and are finding it surprisingly difficult to do so.

Apart from BP, whose production increase is linked to its purchase of half of TNK in Russia, all the majors are seeing their production stagnate or decline.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Sun Jul 9th, 2006 at 05:18:45 AM EST
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This presupposes that the oil companies want to increase their production.

Their profits are rising nicely at current levels. Why incur the added expenses of exploration and increased capacity. I know we don't think much of their abilities to plan for the future (BP aside), but why expand now when one can harbor one's resources and reap the benefit of higher prices in the future.

If oil goes to $100 then the companies show a 25% increase in value with no effort on their part. This is a better return than pumping oil currently yields.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Sun Jul 9th, 2006 at 09:24:27 AM EST
[ Parent ]


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