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oversight isn’t based on justifying the need but rather the funding mechanism. With the significant revenue generation related to oil production, ample resources do exist and should be appropriately allocated in the year’s ahead.


Market influencers


Ultimately drilling companies and their executives don’t create demand, consumers do. It can occur in a variety of ways including directly at the pump or from the purchase of petroleum based products. The reality is that energy needs and the thirst for oil globally is the catalyst driving the need to drill. That demand


move up the price if the dollar continues to weaken as more new currency is introduced by the federal government. Mounting levels of national debt inadvertently become a catalyst for higher commodity prices since most are priced in U.S. dollars. While an inflationary environment typically moves up the price of crude incenting drilling activity, demand destruction also becomes a possibility if prices at the pump move upward too quickly.


Striking the perfect balance is virtually impossible, and having the right mix in place has tested every Federal Chairman in the past and will continue


Spring 2011 • BAKKEN BREAKOUT


phenomenon has and will continue to support a lucrative market for crude oil around the world.


Recent events in the Middle East further complicate supply side dynamics as fears of unrest have caused the price of oil to spike over the $100 mark. From a fundamental standpoint, excess global production capacity could quickly make up for any shortfall from a country like Libya if needed. The real issue relates to instability in that region, injecting a level of concern and uncertainty into markets causing upward pressure on the price of crude oil.


Inflation also has the potential to


to in the future. No inflation means a stagnant economy; too much means rising prices at the pump and eventually an unsustainable burden on the general population.


In the end the world is heavily reliant on oil, and the thought of any real change in the foreseeable future is unlikely.


Future challenges and opportunities It’s not surprising that with prosperity comes controversy. Environmental groups continue to hope for a future Environmental Protection Agency ruling that would link hydraulic


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