As oil prices continue to drop, industry experts debate the possible consequences of lifting the ban on U.S. exports. Also, the EIA forecasts continuing low gas prices resulting in savings for the average household and Chuck Davidson weighs in on the future of the oil and gas industry.
The price of crude oil recently dipped below $60 a barrel in several markets as the American Petroleum Institute reported an increase in U.S. inventories. At the same time, crude stockpiles increased to 1.9 million barrels last week according to ForexLive and LiveSquawk. Given OPEC’s decision to maintain production quotas at 30 million barrels a day, Bloomberg analysts suggest that oil prices could possibly drop to $50 a barrel in 2015.
According to the U.S. Energy Information Administration, the average household in the country will spend $1,962 on gasoline in 2015, $550 less than the previous year. As the price of gasoline continues to drop for the eleventh week straight, prices are expected to stay low into next year.
Congress has recently sparked discussion towards ending the ban on U.S. oil exports. However with the abundance of light crude oil in the global market, many industry experts remain skeptical towards how the sustainability of increasing exports in an already oversaturated market. “If they dropped the export ban today, how much crude would get exported?” wonders Harold York, vice president of Woodmac. “Today? I say none. At these prices, why would a barrel leave?”
As Chuck Davidson, chairman of Noble Energy Inc. approaches retirement in May 2015, he urges industry experts to consider several aspects of the future for the oil and gas industry. Davidson emphasizes several key components such the sudden growth and oversupply in the U.S. market, environmental activism, drilling practices, demand for natural gas, and long-term oil production through technological advancements.