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-- -- -- -- -- has also been talking about oil and commodities and oil falling on disappointing jobs numbers again but our next guest says price is actually headed higher.
As the EU embargo against -- and sinks in joining us now Ken Morrison -- university professor and director of the energy policy research group.
Okay -- so the EU embargo started on July 1 of 2012 and years saying at this point.
It hasn't really kicked in we are going to see oil prices go higher.
Hi Tracy that's the essential.
For the simple reason that 24%.
Of a rainy and exports each month now don't have anyplace to -- And for the last three months.
Terror and has been attempting to find replacement and users and it's simply hasn't worked.
The problem though that people haven't recognized yet and the only reason we haven't is because of the other difficulties that have been emerging in Europe that have sort of taken over the headlines.
Is that there are three major European.
That have serious problems now because they no longer can get.
Are reining in crude and unfortunately there -- the three weeks sisters that have the primary debt and credit problems.
Greece Italy and Spain.
So what we're going to be seeing now is that that southern -- in Europe.
He's going to have an energy difficulty to compound the debt difficult and we already know they have.
But we don't know combined for the front we don't amounted to bit the supplies are there I mean we we know that Saudi Arabia says when push comes to shove they'll just pump more.
And we have a weak global economy so demand is down so it's supply is -- and demand is down.
Do we care what every consumer.
Well a couple of things -- number one Saudi Arabia has guaranteed supply but they've only guaranteed price through the first month.
As that price pressure starts increasing even though the volume is there that volume is going to be more expensive.
Secondly if we take a look at overall global demand figures they have been going down.
But they're still higher than we anticipated at this time last year both the OPEC figures.
And the IEA.
Are still arguing that were going to end up this year with a one and a half percent global increase in demand.
And that's gonna put us within three million barrels of the absolute world capacity for supply at least for the next couple of years so even though we've got the supply out there.
That demand dynamic is still going to be pushing up the prices.
Okay but back in the day prior to this global economic slowdown if we heard a word from I ran.
Oil prices went to the moon it's not reacting like that so this is going to be a slow painful climb up that.
Well it's going to be a climb up I look right now that our base price is moving forward and by that I mean within the next month herself.
We're gonna look at 92 to 95 dollars here in the United States and a 105 -- -- hundred.
Ten dollars on Brent prices in London and that's just about going to be the base.
Here's the problem right we take a look only in terms of the oil prices that are the net result of what's occurring in Iran Iran now has significant political and economic problems internally and that brings in the raid on predicted -- -- And part of their problem is the fact that the global economy slowing down so it's quite secular Ken -- thank you so much for being with us.
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