EASY TO FEAST IN A GLUT:

'Feast of riches' may be over for oil companies (Clifford Krauss, January 12, 2007, International Herald Tribune)

"It's not going to be very pretty," said Fadel Gheit, senior energy industry analyst at Oppenheimer. "There will be no more record earnings."

The predictions of disappointing earnings are based on the fact that the average spot price for benchmark crude fell to $60.06 in the fourth quarter of 2006 from $70.56 in the third quarter. And that slide came as OPEC announced two production cuts in two months at the end of last year.

"Everyone is looking for the bottom," said Michael Rose, director of the energy trading desk at Angus Jackson in Fort Lauderdale, Florida. "But where is the bottom? Is it $50 a barrel, $40, $30? Nobody knows."

The bottom, of course, is $0. We'll eventually leave oil easily accessible but unpumped.

Posted by Orrin Judd at January 12, 2007 10:50 AM