2 October 2004
I was here in Oklahoma in 1982, so I remember the Great Oil Bust entirely too well. Eric Siegmund, who runs the Fire Ant Gazette from Midland, deep in the heart of the Texas oil patch, recalls the days just before:
I remember a chart hanging on my office wall in 1982. It was an extrapolation of predicted oil prices, working off the run-up from the preceding few months. $50 was the cap on that graph; it represented the dreamed-of-but-unobtainable Holy Grail for oil producers everywhere.
Crude oil futures closed at $50.12 Friday on the New York Mercantile Exchange. Of course, fifty bucks today isn't the same as fifty bucks twenty-two years ago, and neither Oklahoma City nor Midland is acting cocky these days:
Producers I know are grateful for the premium, but nobody's actually doing deals based on it, or running economics using it. And thus far, I haven't seen any signs of the telltale oil-boom excesses that accompanied prior run-ups: new Benzes in the high school parking lots; yachts parked out in the horse pasture awaiting transplantation to water, somewhere; Lamborghinis with trailer hitches; signs announcing new private clubs. Sure, there seems to be a few more Hummers tooling around town than usual, but AFAIK, Rolls-Royce isn't planning on re-opening a dealership in Midland.
Jackie Cooper Imports in Oklahoma City used to carry a wide range of high-end motor cars, including both Rolls-Royce and Maserati it was through their kind indulgence that I actually got some seat time in a Maserati in the early 80s but today they sell only BMWs and Mini Coopers (Minis Cooper?). Seekers of hyperexpensive sleds must search elsewhere.
The mantra among producers here has been "O Lord, just one more boom, and I promise not to piss it away this time." I believe they were serious.Posted at 9:56 AM to Family Joules