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Supply Driving the Price of Oil Down?

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    Energy XXI CEO John Schiller on the outlook for oil demand and prices.

  • Duration 3:09
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Our public for the fourth straight trading day hitting seven month lows but this next loyal CEO says don't get used to it because demand is skyrocketing -- -- world.

And supply has yet to catch up John Schiller is the CEO of energy 21.

He joins us now in a Fox Business exclusive John good to see you thanks for coming in.

-- prevalence all these folks who say look we go to the reason prices coming down we have this huge supply now we've got to a glut of oil in Cushing and that's that's why.

That's why the oil prices come down to which you say.

That's the domestic -- -- all the worldwide commodity look around the world.

We've got capacity to produce about 91 million barrel that there were consumer night so.

The other -- you know in the world real 1% excess capacity so so to supply have any effect on the price of oil in your mind.

About it I mean I think the price as you're saying about a hundred dollars for -- a direct result.

Of the of the very minimal amount of excess capacity to demand so but eventually the demand is gonna continue such strong enough so that.

The price is gonna come back up right now you think the prices low WC.

Periods like this where you draw but overall the troops still going to be I think broke above -- hundred.

We look worldwide half of those.

Consumption in the world now by the developing nations and that's a huge difference from where was five years ago now prices are all about the future you know that better than anybody because that's what you -- -- is the future and and you'll look at the future you think of natural gas for example the glut of natural gas we have -- They're practically giving -- stuff away isn't that eventually gonna spill over in the oil industry is as big power plants which over from oil and coal -- gas.

But they its -- over but it's it's a little bit different member of natural gases.

Local market only pipelines can't really export now this country forever you can't if you get liquefied -- and if the government allows you to a lot of let's say yeah a lot of ifs involved that's true.

-- I think you can't say as we -- -- be a great manufactured register what Dow Chemical some of these guys are doing is starting to use.

Natural gas for free stock and that's -- is gonna help our economy.

The impacts at the end of the day -- decouple those in the house wall to wall commodity natural gas is local.

I don't believe you have that big impact from what we do what about shale oil we're finding dead new new ways to get -- very similar to by the way to -- -- where it -- that we get natural gas or fracking process.

Isn't that gonna cause and tremendous extra supplies but think the -- then there were you when you look at what the cost to get the -- on the ground we run the numbers a lot different ways.

You keep coming back the 9095.

Dollar WTI -- those guys -- Right -- economics work so follow -- from Oppenheimer who says you know the natural price of oil right now should be about 85.

When should take most the risk premium -- he's wrong.

Lots of not a not a 585 not that much difference -- but we are talking WTI.

I think -- we believe long term you're not doing away with -- -- differential between WTI and Brent.

Probably the cost of transporting a barrel on mr.

Buffett's -- about ten dollars and -- we're going to be so.

-- WTI -- -- brutal round and so by now.

By now John -- good to see you sir thank you for coming in appreciate --

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