Unfazed by the ecological disaster in the Gulf, oil companies will throw more money into expanding operations in the sea. Energy companies and related exchange traded funds (ETFs) could benefit from the higher sustained oil prices.
According to a new survey of oil companies, spending for new wells, platforms and drilling rigs will increase 11% to around $490 billion next year on deep-water drilling, reports Stephen Beard for MarketPlace. Companies are banking on higher crude prices in the future to make up for the difference. [Coming to America with Infrastructure ETFs.]
Dr. Clifford Jones, an energy expert at Aberdeen University, also notes that “oil production and oil exploration won’t stop” because “the world needs 80 million barrels of oil a day. And that state of affairs can’t be changed in response to one event, however tragic.”
VOA News says companies are expected to spend more because untapped oil and natural gas can only be found in harder to reach areas and today’s higher oil prices will be sustainable.
Crude oil prices are hovering below $90 a barrel and some analysts opine that the price could shoot above $100 next year. Additionally, the 12-member Organization of the Petroleum Exporting Countries have not showed signs of raising oil supplies.