When I was growing up, I used to watch The Beverly Hillbillies with my father when it was on TV. It was a father-daughter thing–he loved the crazy show, even though just the sound of it on the television drove my mother nuts, and I loved spending the time with my dad.
To this day, whenever an old episode of the show comes on, you can bet my dad’s turned up the volume and is singing the theme song, much to the chagrin of my mother…
“Come and listen to a story about a man named Jed A poor mountaineer, barely kept his family fed, Then one day he was shootin’ at some food, And up through the ground came a bubblin’ crude. Oil that is, black gold, Texas tea…”
When I saw that crude oil jumped to its highest price in two
months yesterday ($55.57), the theme song to the good old Beverly Hillbillies got stuck in my head. There I was, reading about how U.S. inventories of crude oil have fallen and how there are concerns that OPEC cannot keep up with the accelerating demand for fuel in both China and the United States, all the while humming that stupid theme song…
Then I got to thinking about poor old Jed Clampett.
In the show, if you’re not familiar, Jed Clampett went out bird hunting one day with his loyal dog Duke, and he ended up discovering a gush of oil when he shot at the ground. Soon after, the OK Oil Company purchased the Clampett property for $25 million.
Now, imagine if Jed Clampett struck oil today.
With inventories down and demand up, he’d have a lot more interest in his property than just the OK Oil Company. Heck, he’d have ExxonMobil, ChevronTexaco, and Shell knocking at his door.
Think about it this way: The United States currently uses about 25% to 30% of the oil produced globally, yet it produces less than 3%. Finding more oil in Jed’s backyard would be a boon for U.S. crude inventories and domestic supply.
OPEC has pledged to increased targets for its member producers by 500,000 barrels a day to 28 million to take the heat off oil prices. Nice gesture, but the fact is that 10 of the 11 members with quotas (all but Iraq) are already pumping 28 million barrels out a day.
Many producers believe that the speculation and fear over inventories running out and a shortage of oil are unfounded.
Qatari Minister Abdullah bin Hamad al-Attiyah said this on the topic: “The world faces no shortage of supply of oil. It’s concern about products, like gasoline, diesel. There is a shortage of production of these because of the limitations in refineries. That is the problem that everybody should be paying attention to. How can we solve it? OPEC has no solution.” Many other industry experts share his opinion that updates to refineries should be the focus, but such reform will take time.
In the meantime, however, oil prices will remain high and continue to grow (they’ve already risen 49% in the past year alone!), and we’ll continue to feel the heat at the pump and in increased costs for goods, as manufacturers see higher expenses for fuel.
And Jed Clampett? If he were to stumble on the bubblin’ crude today, he’d be worth billions and would likely be moving to the Hamptons with the rest of the super wealthy crowd.