WICHITA, Kansas _ Conditions are just right in the oil patch. The price of oil is up, but not so much that politicians are grandstanding and people switching to smaller cars.
At the same time, costs remain relatively low.
The resulting strong profits are driving an increase in production and more drilling, say local oil company executives.
"We're very comfortable with the oil prices at these levels," said Kevin Davis, the owner of Red Oak Energy in Wichita, a geologist and operator of a number of wells. "It's important to stay below $100 and stay out of the cross hairs."
Some experts say prices will have to fall in the near future, given a recent increase in production and the continued sluggish economic recovery in the U.S. and Europe.
Consumption by developed countries is down 8 percent from its 2006 high, and at the same time oil-producing countries have been ramping up production.
Supply and demand dictate that prices should fall _ but they aren't.
Benchmark oil prices rose above $84 a barrel on Friday, helped slightly by strong sales of new homes that surged last month from a record low in February, which is a key sign of further economic recovery.
"There's no real reason for oil to be more than $60 a barrel, but the markets have been dominated by speculators for the last four or five years," said James L. Williams, an oil market analyst with WTRG Economics in London, Arkansas.
Barring a major catastrophe, war or a global economic boom, Williams expects oil to remain between $70 and $90 a barrel because Saudi Arabia wants it that way.
If it threatens to go too high and hurt the world economy, the Saudis will raise production. If it goes too low, they'll cut production.
Read more of this story at kansas.com
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