Even companies like ExxonMobil (XOM) and Continental Resources (CLR) see the lifting of U.S. crude oil export ban as a welcome move and push for the reform.
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Congressional leaders appear ready to lift the nation’s four-decade ban on exporting crude oil, drawing mixed opinions about its immediate benefit to Louisiana and USA consumers because of rampant global production and already-low oil and gasoline prices.
In an appearance Thursday on New Orleans’ Morning News with Gerry V., Congressman Steve Scalise said it could make the US “the Saudi Arabia of the world”. “Conceivably, if there were not an export ban, we would’ve exported a lot of light crude, but in the existing market, where oil grades of sweet crude have been compressed and pressured, there’s not much of a difference between the price of light sweet crude and the price in Asia or Europe”.
“The challenge is, in the current price environment, the differential between worldwide and USA crudes … is so narrow that it’s not economic to export from the US today”.
Crude oil exports will benefit American consumers.
“Though President Obama had previously spoken out against lifting the ban, we believe that he will sign the bill in part because of the renewable energy tax breaks included in the legislation”, he said in the emailed note.
US data on Wednesday showed the extent of the oversupply, which remains despite a massive drop in drilling over the past year as crude prices collapsed.
But recent changes in the world market have shifted Helms’ outlook, and he’s now projecting that lifting the ban could affect Bakken oil prices by $2 a barrel.
In Title I, Section 101 of the more than 2000-page Consolidated Appropriations Act, 2016, the proposed legislation explicitly repeals Section 103 of the Energy Policy and Conservation Act, which has required that the president prohibit the export of crude oil except in limited circumstances. U.S. Sen. John Hoeven, R-N.D., who has worked on several provisions to lift the ban, called the vote a triple win for the United States. “In the past, there was a huge spike in oil prices every time there was a dust up”.
The hedge fund, run by former Credit Suisse traders Beau Taylor and Trevor Woods, manages about $1 billion, taking bets in the oil, natural gas, coal, copper and aluminum markets. “Once you had the big shale boom that’s occurred over the last decade, you had unprecedented increases in oil production in the U.S. That’s why we’ve been talking about the export ban over the last few years when it largely wasn’t discussed for 30 years before that”.
“But it’s inappropriate to think that they somehow offset giveaways to the oil industry, like dismantling the export ban”, he added.
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RBC said the immediate impact of lifting the ban will be muted.
