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Oklahoma oil tops $50 a barrel (Good News for Domestic Oil Production)
The Oklahoman ^ | October 9, 2004 | Adam Wilmoth

Posted on 10/09/2004 8:03:44 AM PDT by PhiKapMom


Oklahoma oil tops $50 a barrel

By Adam Wilmoth
The Oklahoman

Oil coming out of the ground in Oklahoma sold for $50 a barrel for the first time Friday, continuing a rapid run-up that has demolished previous price records.

The recent price surge has led to increased gasoline and utility costs, but it also has sparked a boom in Oklahoma's oil patch as producers such as Melvin Moran embrace more expensive technologies in an effort to squeeze out additional oil from existing wells.

"At today's prices, if you could increase production by just a barrel a day, you could generate a lot more money," said Moran, owner of Moran Oil Enterprises of Seminole. "It's worth it now to spend several thousand dollars to get more oil out of the ground. When prices were lower, we couldn't afford to give the wells the expensive treatments."

Each oil field work-over project provides additional jobs for rural Oklahomans, Moran said.

Oil prices have risen sharply over the past two months, largely because of continued violence in the Middle East, supply disruptions caused by Hurricane Ivan in the Gulf of Mexico and an oil workers' strike in Venezuela.

Oklahoma Sweet crude soared 75 cents Friday to close at $50 a barrel. The Oklahoma price is up $3.75 in the past week.

Before this year, the record high price for Oklahoma oil was $39 a barrel, set Oct. 9, 1990, during the first Gulf War.

On the New York Mercantile Exchange, light crude for November delivery climbed 64 cents Friday to close at $53.31 a barrel. The price is up more than $3 in the past week. The higher prices have led to a revitalization in Oklahoma's oil patch, which has been overlooked in recent years as the state's energy producers switched their focus from oil to natural gas.

While higher oil prices have hampered consumers at the pump and hurt heavily fuel-dependent industries such as trucking and airlines, energy-producing states such as Oklahoma have experienced some significant benefits from the higher prices.

In fiscal year 2004, which ended in June, the state collected $116.4 million on oil gross production taxes alone, about $25 million more than expected. Most of the excess revenue was spent on common and higher education, state finance office spokesman Shawn Ashley said.

At the same time, natural gas production taxes generated $444 million, about $87 million more than expected. The excess natural gas revenue was put in the state's general fund, Ashley said.

Through July and August, the state collected nearly $21.9 million in oil production taxes and $82.9 million in natural gas production taxes. Those numbers do not include the current oil price run-up, which began in early September.

Despite the climb, however, Oklahoma Independent Petroleum Association President Mickey Thompson said prices are not likely to continue climbing for long.

"I think as it continues to go up, there's a little more feeling of stability not that the price will stay at $50, but that it might stay for a significant period of time above $30, which is a respectable range for most Oklahoma oil producers."



TOPICS: Foreign Affairs; Front Page News; Government; News/Current Events; US: Oklahoma
KEYWORDS: energyprices; improved; moreoil; oil; technology
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To: norraad

Still don't have enough refineries to take care of growing population growth. Sure would like to see our Domestic Production ramped back up, though for many reasons -- one of which is the economy... we need more Respublicans in office to vote in the energy bills.


41 posted on 10/09/2004 1:12:18 PM PDT by Arizona Carolyn
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To: Wilhelm Tell
Don't forget coal. We have abundant supplies and newer technologies are cleaner. Furthermore, if the choice is between being having a little more air pollution and having a good job in my field versus having pristine air and being a telemarketer, I'd rather keep my job and live with a little less perfect air.

Bill

42 posted on 10/09/2004 3:17:45 PM PDT by WFTR (Liberty isn't for cowards)
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To: Osage Orange

You know, not everyone makes what you and I do. Some people scrape by. In places like southern Claifornia where people can drive over 100 miles each way to work each day, that $2.25 per gallon becomes major.

Wen we see the full effects of that $53.00 per barrel, we're going to see gas prices skyrocket.

In the past, moves in the price of oil have run up prices by $1.00 or more per gallon. Since the price hit $40.00 per barrel, we haven't seen much of a rise. I predict $2.75 to $3.50 per gallon by spring. If two family members have a big commute, this can amount to a lot of additional outlay.

What happens to prices of just about everything when gas prices escalate? Gas prices aren't the only thing affectd.

This is bad for inflation. It doesn't bode well for our economy.


43 posted on 10/09/2004 3:19:55 PM PDT by DoughtyOne (US socialist liberalism would be dead without the help of politicians who claim to be conservatives)
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To: PhiKapMom

No, developing alternative means of producing energy would be good for all. This will be good for oil producers.

$50 to $60 dollar a barrel oil is not good for everyone.


44 posted on 10/09/2004 3:22:23 PM PDT by DoughtyOne (US socialist liberalism would be dead without the help of politicians who claim to be conservatives)
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To: DoughtyOne
I've pretty much no quarrel with this post.....( Although I don't think oil will stay much above $50 for very long...) What I did have..is a disagreement with your use of the word catastrophic.

Hey...maybe it's just my personal hang-up....But a $2.00 gallon of gas isn't catastrophic...in my book. There are hundreds of ways to compensate/budget for this extra expense.

I have to get to work. I don't need cable T.V. Or...fill in the blank___________

FRegards,

45 posted on 10/09/2004 3:42:19 PM PDT by Osage Orange (Hillary's heart is darker than the devil's riding boots....................)
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To: Osage Orange

Okay, let's strike the word catastrophic.

I can tell you right now, if gas goes over $3 per gallon, I for one am not going to be a happy camper, and I can afford it.


46 posted on 10/09/2004 3:55:48 PM PDT by DoughtyOne (US socialist liberalism would be dead without the help of politicians who claim to be conservatives)
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To: RightWhale
Here in eagle, we have the road in the summer, so that helps keep the price down. In every village, there is one guy that usually accumulates everything with time; human nature and what America is about. Our guy is actually pretty fair and doesn't raise prices until he gets new fuel in spring so we might have a respite for the winter. One thing is high test is only a couple cents more than regular so at least I can run that.

Last winter I spent 300-400 a month on fuel for 3 snowmachines. When it gets minus 50-60; I don't even start the trucks and we ride the snowgos to school. Those fan cooled skidoos run fine in extreme cold. Guess I'll be spending double that this winter and I sure hope they bring out some wide tracks that get over 10 mpg.

I usually run my dogteam 3 days a week 40-50 mile runs down the yukon. Maybe I'll be using them for basic transportation down the road like some of the other locals up here. We have one guy that brings 3 dog teams to church parking lot and doesn't even use snow hooks; just turns sleds over and the dogs curl right up between howling to the music. I can see it now, wife in basket and kids with dogs pulling them on their short snow bds, my wife would just luv that with eyes iced right up. Anyway, can't imagine gas prices 7 bucks.

Pretty seasonable over this way, chums still running good and have even got a bunch or 3 foot burbot and some sheefish; the yukon provides.

47 posted on 10/10/2004 8:33:23 AM PDT by Eska
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