[lbo-talk] Production costs behind old prices

Wojtek Sokolowski swsokolowski at yahoo.com
Thu Mar 20 10:56:03 PDT 2008


--- Andy F <andy274 at gmail.com> wrote:


> alarming pace. Last year, the average investment per
> barrel was just
> shy of $15. [...]
>

[WS:] How can the investment increase from $5 to $15 per barrel explain the price incerease fro $77 to $105 per barrel? You need to take other factors as well, such as demand increase, or the fall of the dollar. $35 per barrel in 2000 USD equals about 40 Euro, but $105 per barrel in 2008 USD equals only about 70 Euro, so from that point of view, the oil price is not up that much as the USD-denominated prices seem to suggest - it is the USD (and currencies of oil producing countries pegged to it) that is weaker.

Wojtek

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