(April 1, 2004, updated) -- When OPEC's potentates cut production and raise prices, it hurts personal pocketbooks but produces additional revenue for LB City Hall's oil properties...which feed the General Fund and Tidelands Operating Fund.
Responding to an inquiry from LBReport.com, LB's Manager of Oil Properties, Curtis Henderson, noted that Wilmington Crude is different than OPEC's commodity but tends to rise and fall along with it. As of this posting, Wilmington Crude was at roughly (very roughly) $30 a barrel...considerably higher than the $20 per barrel assumed in 2003 in preparing the current FY 04 budget.
With appropriate caveats on the difficulty of predicting future commodity prices, here's a look ahead. Mr. Henderson says City Hall's current estimate is that for the full budget year (Oct. 1/03-Sept 30/04), the price of Wilmington Crude will average-out at roughly $26 per barrel.
[updated] If that holds true, it could translate into roughly (very roughly) $3 million more than expected for LB's Tidelands Operating Fund and roughly $2 million more [and it will hopefully be more, says Budget Manager Mike Killebrew] for the General Fund via the Oil Properties upland fund.
LB Director of Oil Properties, Chris Garner, noted that City Hall financial and budget management staff are in the loop on this.