Is the oil well become less and less so the price of crude oil will only increase and will never decrease?

Question

Is the oil well become less and less so the price of crude oil will only increase and will never decrease?

Answer 1

If the number of active wells declines, that will tend to force the price of crude higher as demand keeps outstripping supply and the current fields are sucked dry. However, there is a point at which the price becomes so high that demand will begin to drop, as well. There was a big, although temporary, drop in crude prices last week when it was found that demand for gasoline in the U.S. declined for the first time in years. Also, with the price going so high, some foreign governments have discussed ending their subsidies on gasoline, which will mean their citizens would face higher prices and, hopefully, slow their consumption.

That said, there is no reason for the number of wells to be declining. There are plenty of proven reserves right here in the U.S. The problem is getting the crude out of the ground has become so long a process due to the environmentalist lobbies. That is also why we have not had any major new refineries built in this country for about 30 years or so. Even offshore fields lay off limits for the same reasons.

So, while the reserves are definitely finite, there is enough available to keep us going while alternative energy sources are further developed. Until then, pricing will remain a matter of supply and demand, as well as a matter of geopolitical events.

Answer 2

That would be logical at first look but there's more to it so the price can easily go down as well as up, though the price will never be really low again.

  Right now, the price is high from many reasons.  One is that it gets more expensive to get the oil as the fields are used up but that is a very small and slow increase.  The huge main factor is that asia is booming and so many vehicles are being bought by the new middle-class there and the economy has produced a lot of businesses including factories with machines which use oil as well.

  Another big reason, at least here in the US, is that our own refineries are incapable of keeping up with demand.  We haven't built up our infrastructure since the 70s so of course we don't have enough plants to supply all the population we've added since then.

Answer 3

actually china dicovered an oil well in the south china sea some time in the last 2 or 3 weeks in may brazil dicovered a new oil well and in may some one actually found oil in his back yard.(LUCKY)