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Oil to Fall to $60 a Barrel?

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    Global Petroleum Service President Michael Lynch on the outlook for oil prices.

  • Duration 3:32
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It -- -- -- oil is trading higher today off to China GDP data.

Eases worries -- little bit of a hard landing -- this next oil analysts expect prices to fool possibly get this to as little as sixty bucks a barrel.

Michael lynch is the president of the global petroleum service he joins us now.

That would obviously -- be very welcome news to the consumer who right now is looking at.

I turnaround in oil prices -- -- heading higher.

Yeah up I think dead is that we've been heading higher on hopes that the economy would -- a big balance in the third quarter.

And that looks like it's not happening in the news out of China.

Which is muscle with a black box for the dark gray box suggests it could conceivably see a meltdown now.

How concerned are you.

Michael about Iran it doesn't take much Saber rattling from -- country to really hit the oil market up pretty quickly.

Well you always expected there's a possibility of a price spike because of any of a variety of political problems but yet -- the Iranian situation is is on the of the top of -- The the cheap right now and some serious threats out of there could send the prices back up towards ninety dollars -- What is so you're saying that we could still go higher from here -- -- -- -- about ninety dollars -- you're saying longer term do you think the real price.

-- a barrel of oil is somewhere around sixty dollars.

That mean that we wouldn't see a weak economy possibly for quite some time.

You know I.

Think more likely what we're gonna see is a return until something closer to historical norms you know for most of the history of the industry.

The price -- about thirty dollars a barrel -- the these prices are usually -- -- go back to sixty that's really good for the consumers.

The industry gets squeezed a little bit but most of that money comes out of tax payments.

And Michael what I what happens and OPEC says.

You know we really like when those prices are more like a hundred dollars a barrel but they -- Yes that's true end -- the thing is that you and you are likely to see -- saudis in particular try to support a price somewhere between seventy and eighty I would guess.

But at the end of the saudis have been here before where they saw a long term downward drift -- prices to the point where -- They said you know look we can't support this are our sales are dropping too much we're not there yet but in a couple years we might be also -- to mention -- -- natural gas Michael hit all time lows in April all eyes are gonna fully recover up.

A well how slow the -- is a loaded word if I don't think we'll be back to the eight to ten dollars we saw.

A few years ago that was unusually high.

But I do think that two dollars was way too low so probably what we're gonna see.

Is prices are drifting not to somewhere between three and four dollars.

And that we're gonna find out really what does it cost to produce shale gas that's not really clear yet.

Why and that's not really -- -- it -- a lot of unknowns still in that market that's right continue to see such volatility.

I guess so -- -- -- -- -- lastly wanna know from these that oil market that we're seeing today.

I do you believe that we could see a dropping gasoline prices if we -- drop to sixty dollars a barrel what's a fair price for gasoline.

I think.

Quite possibly we're talking somewhere around 32 money on a on a national level -- was about another twenty cents lower than they are now I think dozens of pretty good chance we'll see that before the end of the summer.

All right interesting stuff thank you very much Michael lynch global petroleum service president Michael thank you very much appreciate it.

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