As I understand it, today crude oil is sold as a commodity so is subject to
supply and demand.
Unlike the old days from 1880 or so until 1980s when the oil companies set the
prices. In those days before the first shortage, OPEC would try to cut
production to raise prices, but the USA had enough pumping capacity to make up
the difference to keep the prices stable. Then around 1968 the USA could not
pump enough to make up the difference which caused a shortage when OPEC cut
production and raised prices.
However, this made drilling in places like the North Sea economical, so
everyone started looking for and drilling for oil anywhere they could which
caused a glut of oil on the market around 1985 which caused the price of crude
oil to collapse. This caused the open market to set the price instead of the
oil companies, to stabilize it and that's what we have today.
So today if an oil producer cuts back a bit, no-one can make up the difference
in supply and the price rises. The USA is pretty much tapped out.
Lack of refineries is a whole 'nother issue.
I could have some of my facts wrong, but I think most of it's correct, and
obviously it's a simplified picture.
-------------- Original message --------------
From "de Brebisson, Cyrille (Calculator Division)" <cyrille at hp.com>
> Hello,
>
> Although more can be produced, we are working at the moment at 85% of
> capacity for production and 98% for transport, which means that the
>es!
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