actually the glass is half full, page-23

Guys,

the price of oil is great at 90-100/bbl, it won't hold up here at 130-150 for long, as it will be bad for world economy, we haven't been weaned of the black stuff yet and not for some years yet. But if it gets too expensive too quickly everything suffers.

Saudi have increased production by 200kbpd, was announced today, after much harassment by all of G8. Now this goes to show that either they don't see much supply/demand issue, or they can't go much more.

I don't reckon the "bubble" will burst until we have had a bigger run up on price in a real short time, say up to 250 in next few weeks. Even then the drop back to more fundamental prices, will see it stay around the 90-100/bbl.

As for the water, there will be oil/water contact in these types of deposits. What is happening here is they are finding the edges and bottom of the oil deposits, so they are able to refine their reserves and drilling/production strategy. This is an unknown quantity as far as oil fields go, so they are "feeling" thier way as they go.

All this is my view or take on the oil story, and I am probably wrong, but there you go...

I am definitely "half full"

cheers

steve