Daily Management Review

The World Market is Not Afraid of American Oil


12/16/2015


On Wednesday, the US Congressional leaders reached a compromise on the bill that would remove the ban on the oil export. On Tuesday, OPEC Secretary General Abdullah al-Badri said that lifting the ban on American oil exports by the US Congress will not have a significant impact on world prices. However, some analysts do not agree. They believe that if the US will start export oil, it will cause "structural changes" in the market.



Gregory Varnum
Gregory Varnum
The US Congressional leaders reached an agreement to lift the ban on the oil export from the country, according to Bloomberg. The adoption of this law will continue funding the US government. According to the Speaker of the House of Representatives Paul Ryan, House of Representatives plans to vote on the comprehensive bill on budget expenditure on Thursday. After that, it will be sent to the Senate.

At yesterday's press conference in New Delhi, OPEC Secretary General Abdullah al-Badri said that "the possible export of American oil to the world markets will have no effect on prices." He explains this by the following argument: "the United States still remain an importer of crude oil and petroleum products as a whole. They can export oil in some countries, but at the same time they have to import it from other countries." Head of OPEC said that US manufacturers can export the lighter grades of oil, yet heavier grades will still be purchased from other countries.   

Recently, the oil industry players have revived discussion of the possible consequences of removing the nearly 40-year-old ban, put by the US Congress, on export of the American oil abroad. Earlier, representatives of factions of the Republican and Democratic parties in the US Congress came close to removing the ban imposed in the years of the oil crisis in the mid-1970s. US media reported on Monday that the decision was not taken merely because the Republicans and Democrats could not agree on some technical points.

However, not all agree that the open door for the American oil to the world markets will not affect the prices. "We believe that any lifting of the export ban will cause structural changes in the market, - quotes Reuters Olivier Jakob, analyst at Petromarixx. - Lifting the ban will help release some of the US oil storage tanks."

As stated earlier by White House spokesman Josh Ernest, the administration of US President Barack Obama remains opposed to lifting the ban on oil exports.

source: bloomberg.com






Science & Technology

Scientists Discover Largest Ever Under Water Volcanic Eruption Near New Zealand

Bitcoin craze increased load on the power grid to the maximum

PC And Server Performance Slows Down Due To Security Patches For Chip Flaws, Says Microsoft

Cybersecurity Firm Claims Cryptocurrency Monero Might Be Getting Funneled To North Korea University

The Way We Travel Will Be Changed by The Colorless, Odorless Gas - Hydrogen

EU's Big Change In Data Protection Rules Makes Businesses To Get Ready For It

Artificial Intelligence Helps NASA Find An 8th Planet In Orbit Of A Distant Star

Australian Research Success Could Mean Shatterproof Cell Phones Could Soon Be A Realityv

Top ten hi-tech events of the year

Tesla Considering Designing And Developing AI Chips On Its Own To Support Its Auto-Pilot Project

World Politics

World & Politics

Take and go away: new approach to refugees in Europe

Both The Korean Countries Will Come Together In Olympic Talks

Parties of Germany agreed on the migrants problem

Munich Re: Natural disasters caused record damage in 2017

High-Level Talks To Be Held Between North And South Korea In Over Two Years

Sexually Abusing Children Interests An Estimated 20,000 British Men, Shows Police Monitoring Of Chat Sites

2018 Could See An Increase In Terror Attacks Where Both ISIS As Al-Qaeda Continue To Present Threats

What will happen to European populism in 2018?