Monday, April 12, 2010

Price of Oil as compared to Costs

One source of energy of course is oil. Some say we have 50 to 100 years of reserve of this energy source. Here is what the pricing has done in the past almost 60 years. Price is not determined on cost - http://people.hofstra.edu/geotrans/eng/ch5en/appl5en/oildisruptions.html

Checking out this web page shows that pricing depends on what happens in the OPEC countries and what they do.

The costs vary by regions of the world - the least expensive in the countries that have huge reservoirs. Costs can range from a few dollars to ten dollars per barrel in these countries. This would include exploration, drilling and processing costs. In other countries especially in the United States this cost is much higher - sometimes exceeding $50 per barrel.

The overall trend is for oil to become higher in price. As the price increases per barrel of oil more exploration and more reserves will become economically viable.