AN ENERGY COMMODITIES MARKET TO SETTLE OIL PRICES

With a new record high oil price yesterday, the do-loop goes again. In the earliest days of computer programming, the programmer would tell the computer to repeat a particular operation until a particular (usually numerical) goal was reached. This was called a do-loop.

What is the “goal” of our oil price do-loop? ‘Round and ‘round and ‘round she goes, we will keep reacting to the whim of worldly politics and weather, the fluctuations of market investors and the personality quirks of narcissistic dictators until we create a diversified marketplace of viable energy options.

For insight into the oil price market, here are three stories from the same issue of OIL AND GAS JOURNAL:

Supply falling, prices go up:

HOUSTON, June 27 -- Woodside Petroleum Ltd., Perth, has revised its 2006 production target of 76 million bbl of oil equivalent to 72 million bbl because of reservoir under-performance at Chinguetti oil field in Mauritania and construction delays at the Otway project in southern Australia.

New supply from old field, prices go down but not for long:

HOUSTON, June 29 -- Statoil ASA projects that its Norne oil field in the Norwegian Sea is likely to continue producing longer than previously expected due to the close proximity of commercial discoveries and promising new prospects near the Norne area…with currently increased levels of activity in and greater knowledge of the area, operations are expected to extend to about 2020.

New supply, prices trend down long term:

HOUSTON, June 29 -- ConocoPhillips, operator of Algeria's Menzel Lejmat North (MLN) field on Block 405a in the Berkine basin, plans to resume oil production from that field by the end of the third quarter…

Good to get that settled.