Oil prices spike with rising Iran tensions

Channel: Fox Business
Published: 05/20/2019

Description
OPIS Energy Analysis Global Head Tom Kloza on the outlook for oil prices. FOX Business Network (FBN) is a financial news channel delivering real-time information across all platforms that impact both Main Street and Wall Street. Headquartered in New York — the business capital of the world — FB...



Transcript
What back oil and focus prices edging higher over tensions with iran on sending money futures yesterday spoke with congressman mac thornberry on foreign affairs committee, about potential disruption in the oil market. Due to this conflict, do you expect any disruption in terms of the oil markets given the straits of hormuz and what the iranians might be able to do there? Well, there could be. We s ...
w this past week for tankers received some sort of attack or explosion. That did not sink them, but it may have been a warning sign that iran could do worse and remember. The context here is: iran's economy is in real trouble and oil is a major factor in their economyso. All of this could be part of their plan to increase the price of oil, help their old economy and cause some disruption throughout the persian gulf, those mac thornberry on the foreign affairs committee in the house. As opec says, it will keep production cuts where they are joining us right now is opus energy and analysis from a global head tom klose tom great to see you thanks so much for joining us. You saw the news last week in terms of iran and what they are trying to do undermine the united states. Do you expect an impact to the oil markets? I think it'll be very, very touch-and-go for the next hundred days or soi mean even if iran continues to pump and sort of leak. Some oil, under the guise of of exports that are being closely watched by the us, we're gon na see world oil demand outpace world oil supply for the next hundred days by about a million barrels a day, so that makes the market it-it's not particularly tight. Now it won't be very tight a year from now or next winter, but the next hundred days really anything goes and you've got this market mentality. Now, where it could move two or three or four dollars a barrel on a tweet, a drone or a houthi frogmen.

So we haven't seen this before this is new tom, jackie deangelisto see you, you know, i'm looking at this price just a little bit under 63 and i'm thinking to myself troubling metas whele, so much pressure on a run right now and iran is causing a lot Of trouble, yet the price isn't spiking the way you would expect to see it spike and as it has in history. I pin that to the fact that we are producing here in the united states, more than 12 million barrels a day. Well, i i think you've got a point, but here's the point. I would make that the wti price and cushing is about 63 63 50, but the price of coastal oil, whether it's wti, whether it's brentwhether, it's louisiana, light, sweet or alaska. North slope. Oil is gon na, be 70, 71 72 dollars a barrel. So what's the real price, probably the price on the coast, so we're already seeing most us refineries and refineries that sort of serve the world paying something in the 70s. And if you get some real skirmishes in the middle east, you can you can have a cup of coffee at $ 80 a barrel, or so it could happen more in the next hundred days and in the hundred days after that tom. It'S data mcdowell. How quickly, though, can the shale producers ramp up production even beyond the levels we're seeing now, because you were talking about maybe laterthis year, for example, we had that conversation when of the united states, got rid of the waivers on exporting oil for a number of nations Exporting oil out of a rod, the question was: why now couldn't they have waited until the end of the year? Does that does the fourth quarter? Look better in terms of our production? Here it looks better in terms of our production. Quite frankly, i think they could raise production very quickly by a million barrels a day. The problem is, there are no pipelines to take away that additional oil that happens in the last 60 days of the year when giants fans and cowboys fans are getting their hearts.

Broken byother things, so we've got the oil we've got the oil that's ready to come on. We don't have the pipelines to take it to the to the coast where it can go to the export market. Alright, we will leave it there. Tom great to see you thanks so much nice to see you i'm closer turning us there on oil.


Watch Next

Loading...