Oil Prices Head Up After EIA Report

After anticipation of rises in both crude oil and gasoline supplies, U.S. inventories dropped in both categories according the weekly Department of Energy report. As a result light sweet crude might an ugly, sour rally in midday trading.

Alternative Supplies Right, much effort is being put into finding alternatives for oil supplies than the current structure. OPEC controls nearly half of the world's oil production and a significant portion of their supply comes from Saudi. Until the world will find alternatives to fossil fuels and since oil consumption only expected to rise and prices expected to climb above $60 a barrel, alternatives must be found. Some new players are coming out and old players are being dealt back into this card game. One example of a new player is the new pipeline built in former Soviet states. The pipeline running from the Caspian Sea area runs across Azerbaijan through Georgia and heads to Turkey, where it's loaded onto tanker for sale. This pipeline should be at capacity in by August and will pump a million barrels a day. An old player being dealt back in is Libya. Occidental Oil is shelling out a lot of money to help Libya redevelop its oil industry. Libya, an original OPEC member, has had many problems under economic sanctions from the U.S. and others. Since the Libyan strongman, Mohammar Quadaffi, accepted responsibility and paid some reparations for blown up passenger planes, the U.S. has lifted most of its economic sanctions and allowed U.S. companies to go back into Libya. Those companies hope that Libya has reserves that rival Saudi and in turn would make Libya the #2 producer behind Saudi. The problem there will be bring their facilities up to date as nothing's been done since before Ronald Reagan was president. Another old source could be oil-enriched shale from the Rocky Mountains. It's been tried in the past and oil was squeezed out but the process was costly and with oil prices extraordinarily low in the 80s and 90s, it wasn't cost effective to extract oil from the rock. But with oil prices continuing to climb, many are revisiting the idea and some researched estimate as much as a trillion barrels may be locked up there. That's a lot of oil. John Stith is a staff writer for murdok covering technology and business.