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Where Will We Find More Oil?

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REPEAT AFTER ME
DailyFeed

Repeat after me:

The era of cheap, easy-to-access oil is over.

But don't take my word for it.

L. Farrell Crane Jr., Director of Research and Portfolio Manager for Orleans Capital Management, tells The Wall Street Transcript:

"Decline rates in the Gulf of Mexico, especially deepwater, are very high, on the order of 30 to 40% (and even greater in some instances) post peak production. Globally decline rates are in excess of 6% per year, which means the world has to bring online roughly 5 million barrels a day of new production every year simply to keep supply flat. In addition, the recent incident in the Gulf of Mexico is another example of the existing the supply challenges and more evidence that the era of cheap, easy to access oil is truly over.On a specific note, one of the interesting dynamics at play today is that the deepwater Gulf of Mexico represents a very important part of US domestic production."

Repeat after L. Farrell Crane Jr.:

The world has to bring online roughly 5 million barrels a day of new production every year simply to keep supply flat.

(Thanks to reader Ted Cossette for the heads-up.)

POSITION:  No positions in stocks mentioned.

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