Sep 8, 2006

Oil Discovery Could Mean Energy ReliefSource: Various

The recent discovery of a new petroleum pool beneath the Gulf of Mexico reportedly could boost the nation’s oil reserves by more than 50 percent. While this oil is still years away from the marketplace, it offers a glimmer of hope for growers who have been hit hard in recent years by increased energy prices.

A trio of oil companies led by Chevron Corporation discovered the oil pool about four miles below the ocean floor. Chevron estimated the 300 sq. mile region where the oil was discovered could hold 3-15 billion barrels of oil and natural gas liquids. The oil pool was discovered in the Walker Ridge area of the Gulf approximately 270 miles southwest of New Orleans and 175 miles off the coast. It is the biggest domestic oil discovery since Alaska’s Prudhoe Bay in the late 1960s.

The petroleum pool’s proximity to the United States also could put more pressure on states that have outlawed drilling in their offshore waters.

According to one analyst, the oil may not reach the market until 2010 depending on how much more testing the oil companies have to do.

The AAA’s Daily Fuel Gauge Report announced last week the average price for gasoline in the United States dropped to $2.72 per gal., down from $3.03 just a month ago. Industry analysts expect gas prices to continue to decline to $2.60 per gal. or lower in the coming weeks.