Tuesday, March 5, 2013

Too much oil?

You wouldn't think there was an oil surplus anywhere, with the prices for gasoline, petroleum products, plastics, etc. all being pretty high. The price for oil hovering in the low $90 range doesn't mean anything when there is a surplus....
Here is how it works.
X area of the country has a lot of oil production.
A-W companies pay the standard rates for the oil.
Y company (the one who pays the mineral owners the money) charges around a $10 per barrel surcharge since there is so much oil coming out of the area. Don't agree, then you shouldn't have signed the leases with that clause.

Interesting how supply and demand really works, isn't it. $90 a barrel isn't really $90, for the begining mineral owner anyhow.

In the meantime all this extra oil isn't really a surplus, it's not being stockpiled anywhere. Produce too much and you get penalized, but we don't slow down on the importing... of course.

1 comment:

  1. It can't make too much sense, after all: it's the gummint.