Sunday, February 8, 2009
Experts Say Oil Prices Rising Due to Expensive Barrels
Houston, TX - May 10th - Maxwell Terrenbeck, Associate Systems Director for OPEC, said Saturday that the recent climb in oil prices has been the result, at least in part, to the climbing expenses of producing and maintaining the barrels that hold the oil.
"Oil is contained in 55-gallon steel drums after it is processed. Millions of these containers are needed to store the world's oil. Production costs for these containers, which involves the manufacturing of steel, transport, factory operations, among other things, has been on the rise for some time," said Terrenbeck.
Terrenbeck would not comment on just how much it costs these days to make the barrels.
There has been some speculation that the price of barrel production has equaled the price of the barrel of oil itself. Though experts at ExxonMobile did not offer statistics, they say the cost ratio of oil/barrel product is not an issue for business.
Still, analysts, such as Barrett Nickerson of the American Society of Statics, say their data suggests that a serious crisis looms over the cost of barrel vs. oil production. "It could put a continuing strain on the economy," he said. "For example, I don't see the possibility of oil prices falling below $100/barrel anytime soon."
If oil prices were to start falling again, Nickerson added, the sustained cost in barrel production would create a lag in the change. "The domino effect would take a while to even out."