Newspaper article THE JOURNAL RECORD

Industry Spokesman: $25 Oil Is Fine, but Can Get Too High

Newspaper article THE JOURNAL RECORD

Industry Spokesman: $25 Oil Is Fine, but Can Get Too High

Article excerpt

"With $25 dollar oil we can do very well," Dr. Bruce M. Bell, CEO of Post Oak Oil said Thursday, when the posted price of Oklahoma Sweet Crude was $23.75.

"But we really don't want oil at $40 or $50 a barrel," he added. The adverse impact of such prices on the nation's economy and many Third World countries would be devastating. It would seriously hurt the industry

Bell, who is chairman of the board of Southwestern Bank & Trust of Oklahoma City, spoke to the Awards Luncheon of the Mid-continent Oil and Gas Association of Oklahoma's 80th annual meeting. He also serves as chairman of the organization, which is the oldest petroleum industry association in the state, and one of the oldest in the nation.

Discussing the worldwide impact of OPEC's earlier and recent actions, he said these countries misjudged the decline in demand in 1998.

In 1995-97, production was gradually increased until it reached 77 million barrels of oil per day and the supposed reduction of 2 million barrels daily was merely number manipulation and the total reduction was no more than 300,000 barrels per day, Bell said.

The result was production continued to exceed consumption resulting in severely lower prices.

About the same time, Bell noted, the Asian economy went south as a result of gross overproduction in manufacturing sectors.

"We are fortunate that OPEC has tried to keep the crude oil prices in the Oklahoma Sweet Crude range of $22 to $25 per barrel," Bell declared, but said the organization is committed to regaining its share of the world market. In 1973, OPEC's market share was 56 percent of world exports. By 1985, that share had diminished to 29 percent. Today it is 41 percent, but is growing very slowly.

The rig count in the United States today is around 790 to 800. A few months ago it was 500, which was the lowest since records were kept beginning in the 1940s. …

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