We have been $2.09 in Northern Indiana since Friday.
"We have been $2.09 in Northern Indiana since Friday"
Don't complain, it's $2.35-2.39 in So. Calif.
Here are some thoughts from an-ex petroleum geologist, now atty.
When I started out in petroleum industry, around 1986, the majors started pulling out of the Mid-Continent, and began moving to gulf coast because the reserves weren't big enough. That left independants to develop places like Oklahoma, Kansas, Mississippi, Co, Utah, Wyoming, etc. Then the price was so low, that a 50,000 barrel prospect was not enough return for the risk (used to be 1 out of 10 was a dry hole, 1 out of 8 if you had seismic). At $10 per barrel, upside was only $500,000, and cost to drill and equip was about $160,000, so barely a 3:1 payout on a 1 in 10 chance. So even the independents were not able to develop the Mid-Continent.
Then what happended to the industry. The domestic industry went to zip. Many geologists and engineers left the industry for other professions. So, the industry shrank. In a simplistic way, that is the reason Halliburton is in Iraq, it has no peer to do the kind of work required, because all the other companies either died out or got bought up. Rigs were shipped to Canada or the middle east.
Now, 40 dollar oil. 50,000 barrel reserves are suddenly over a 10 to 1 payout. Things are economical to prospect in the US. But I imagine, for technical and field hands, there won't be enough folk to staff the need.