In an article about world oil prices posted on CNN yesterday, Exxon CEO Rex W. Tillerson, is quoted “Crude prices in New York would be around $40-$45 a barrel without the risk of supply disruptions.” That may be true, but if we look at recent price history, that’s still 2x what crude was selling for in 2002. Check the chart below which has the average price of crude oil per barrel.



I believe that market demand, not only from the US, but globally continues to increase while supply stays relatively flat. That’s a sure fire recipe for price increase. Yes, more oil reserves are being discovered, but each successive discovery is more expensive to harvest. Make no mistake about it, oil is never going to be “cheap” again.


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Technorati Tags: Energy | Oil Price | Supply Disruption

This entry was posted on Thursday, February 15th, 2007 at 7:44 am and is filed under Business, Fossil Power.