Thursday, May 6, 2010

Assessing the Deepwater Horizon backlash - Reuters

Are costs going to rise? Absolutely. Will it hurt oil producers? No, because they are going to pass the costs on to consumers," said Brad Samples of Summit Energy in Louisville, Kentucky...

...But the futures curve for oil prices indicates that some traders may already be factoring in new costs that could make crude more costly down the line.

"Longer-dated oil prices should rise because of this event (spill), since they would reflect the higher cost of getting those barrels out of the ground," Samples said...

..."To the extent that marginal costs rise here, you'll get higher production costs everywhere, in Brazil and Angola and wherever the deepwater play is happening," Samples said.

http://www.reuters.com/article/idUSTRE6456HF20100506

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