The oil price poked its head up over US$100 again this morning.
You might wish you lived in a world without oil troubles. Your car would be less expensive to run. Your house would be cheaper to heat in winter.
But there are two sides to the oil price. On one side is the bloke who pays it. One the other side is the guy who accepts that payment. When oil prices are high, who would you rather be… wouldn’t you prefer to receive the higher price?
Woodside (ASX:WPL) is the big name in Australian oil. It’s the guy who accepts. Have a look how it’s been doing over the last month.
There’s no mystery here. The guy who accepts has been winning.
Will he keep winning? Our guess is yes. Oil production is finite. If we can extract every single drop of oil we know about, it’ll last for 300 years. But that’s not the point. The point is the rate at which we can extract that precious energy. It might have already peaked.
If that’s true, it means the amount of oil we have to go around will begin dropping, even though it should keep flowing in some form for centuries. That’s good for the guy who accepts, if he can keep producing oil.
Markets and Money