OP: Interesting. So, lifting the export ban…how do you see that affecting the oil markets? It sounds like you are saying you think it opens up the possibility of a sort of a second spare capacity coming from U.S. shale. How will lifting the export ban affect oil markets in 2016?
CL: It definitely puts another competitor into the market. Even though it is oversupplied there’s a lot more value in being a consumer and an importer and exporter to the U.S. So a country that is trying to build up trade might want to buy crude from the U.S. with more interest than they would from another country, whatever country that may be.
So there is that to think about, building relationships and trade back and forth between countries, is a big deal. Now that the U.S. is able to do so, that might put us in a favorable spot with a lot more consumers. So I think that this year we are not going to see too much of that pushed forward, but it’s something to keep an eye on. I think that our exports could definitely grow this year, now that the export ban isn’t there. To places that are already being supplied by other countries, we might be able to step in and step up.
OP: Do you see any risk to the oil markets from the conflict between Iran and Saudi Arabia?
CL: You know, that is definitely an issue. I think that the biggest difference now, again, only in the past few years we are seeing the U.S. and other western countries that are staying out of the fray. As long as that happens, there is a chance that anything could happen, and that is not good for anybody. But when you think about the risk-reward…North Sea in Europe, or Russia at 10 million barrels a day, or the U.S. with the ability to climb up and down and export crude, conflict in the Middle East would definitely raise prices but it would definitely be an advantage to countries that are now starting to pick up the pace.
OP: And finally, the answer to the question that everyone wants to know: where do you see oil prices going this year?
CL: Well, I think the funny thing is that in past years we have all had a price target, where we all forecasted. Now I think it is about a range. It’s about where are oil prices going to stay in the next year and probably the next couple of years, at least with this pace of economic growth and oil production.
So, I’d say between $35 and $55 right now. And I think to narrow that down I’d probably say that $45 to $48 is going to be an average price for the year. And I do think that there is definitely more risk to the upside than there is to the downside at this point.
OP: And do you see that persisting through 2017, or going up dramatically, or is it just too hard to tell?
CL: I think it goes up. I think that definitely the tensions in the Middle East are not going to go away. That is something that is historically not going to go away. It is never going to go away. I think that if there are more economies that slowdown or break off from production, we could definitely see that issues like growth in the U.S. pick up the pace of WTI price more than Brent. So I definitely think that is something that could continue over the next couple of years.
OP: Carl, Thank you very much.
CL: Alright, thanks so much.
(Republished with permission from oilprice.com)
