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John Kingston, Platts Oil director, on how the Keystone XL project could potentially impact oil prices in the U.S.
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At all.
While back of -- hundred -- we'll talk about after the -- and -- about a hundred dollars a barrel today for brutality keystone.
Pipeline impact markets in your fuel prices -- the -- John Kingston is Platz global director of news.
Where he oversees their energy coverage.
So John basically you know -- -- incomes and it bring in oil from Canada which you would think would lower prices it relieves and that glut in Cushing.
It's kind of breezes prices so net net what do you think the real impact would be on the price of oil and gas prices the pop.
I don't think there's any net net impact of -- -- -- -- approved what you would do is you bring in more Canadian crude.
And you -- some other crude.
Probably Middle East -- we get pushed out into the global market so there's just as great rebalancing in the one big global oil markets so the reason for doing it really would be jobs.
Part of the whole North American energy sector strategic views possibly strengthening of the dollar -- you know an impact on trade deficit.
But I we view these markets has one great big world oil market and the displacement of Middle East -- in the US by more Canadian -- it all balances out.
I got to tell you it is so hard to accept that getting more crude oil to refiners won't lower prices the pop that's totally counter intuitive -- remember the US is now becoming a major exporter of products so if you.
Brought in a lot more Canadian crude and refining margins were good and the refiners produce more oil that simply export more product in excess of the demand in the US which of course has been and gasoline falling pretty considerably.
So you're saying oil is fungible it flows everywhere so the prices basically gonna stay -- -- what I hear you say is that there is one outside and it.
We're less dependent on foreign imports without question right.
Right now I'm gonna change so -- should the fund's ability is gonna get a real test that the EU bands of -- in imports because.
What's gonna have to happen is you're going to -- the rains are gonna have to find new home for about 400000 barrels a day of oil that they now -- to the Europeans.
I think what how hard is that gonna be well I think -- -- Britain Asia well -- -- governor nation remembers some of these countries are have long term views of Japan China.
They would have to say.
To their existing suppliers you know wanted to get lost four -- we take this step probably it's cheaper while our calculation well with -- well for you by -- wonder about that I wonder if the Chinese who are you know -- -- demand ratchets up all the time they're.
Well over nine million barrels a day of of consumption that they really want to.
Infuriate the saudis the Angolans all the suppliers.
Who come to them I think they'll keep there arena in imports at the level that -- that now are they gonna be an open door and necessarily take in a lot more I really have my doubts.
And Saudi Arabia saying they're gonna ratchet up production if this happens a -- Iran -- of course saying don't do it how does that.
-- -- there's two scenarios the cement the one scenario is the Strait of Hormuz closes and then you talk about millions of barrels a day.
-- if you're only talking about.
400000 barrels a day of crude that goes out of the EU.
Now not been able to find a home really the saudis only have to improve and actions to improve have to increase their output by about that 400000 barrels a day.
You know when that someone called -- rounding error but it's pretty close in an area countries established in about ten million barrels a day now -- the Strait of Hormuz closes.
That's a whole different issue.
Yeah let me bring all the way back to my wallet has this is what I care about here.
It price of the pump right now have big priced -- where oil -- we're looking at here in the US above a hundred dollars a barrel is that all the way -- -- -- we still gonna see price of the pump go higher.
I think it is priced in I think it in the past month or so that the news on fundamentals has actually been pretty bearish.
That did the most that -- the easiest number to look at -- the whole which is basically how much does OPEC have to reduce to keep world inventories balanced.
And right now they are producing a lot more than -- call one of the biggest -- I've seen in several years which is good because you need in the second quarter you're supposed to build inventories.
But I would have thought looking at those numbers.
And a lot of -- because the return of -- I would have thought to looking at those numbers there'd be a lot of bearish push on the price -- -- instead.
You've got the Strait of Hormuz it's -- -- -- -- these fears having a significant impact on the market because right now the fundamentals which we're very -- for a long time are looking a lot looser.
John Kingston you're the best on isn't so good to see you get thank you for having you know studio we appreciate that an interview -- -- -- a -- of next.
I wouldn't have that year refocus your what's going on there and -- that debt troubles.
Might be a bit of good news today but just a tiny bit because fox business for the very latest.
