World oil prices continued to fall on Wednesday. This happens against the background of growth of oil reserves in the United States.
Rig count falls and drops in investment have yet to materially effect oil supply. Demand is still down. In order for the glut to start taking a hit, rig counts and investments in new projects need to fall by 50 percent or more. We are maybe halfway there on the rig count.
In addition, we have just completed projects coming online now that will make the glut even worse in the short term. We haven't yet begun any kind of supply/demand situation that could rationally support a price rise. Speculation and currency flux may bump the price up a bit, but then you run back into that wall of glut.
Lots of profit losses for oil companies still in the pipe..
If it takes $60.00 per barrel to support the domestic oil exploration and supply of oil, I would gladly pay $2.50 a gallon for refined domestic oil rather than paying $1.75 a gallon for OPEC imported oil. I believe that we need to do everything in our power to wean our country off of imported oil. If that means higher prices in the short term, I am OK with that. Bruce