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Also dropped thing but -- -- guess as we still have a long way to go.
Former shell CEO John -- -- joins me now.
Plus talk about the decline John because you have a lot of different voices they're telling us why it.
For is some say it's because the weaker dollar that you got oil prices going higher than -- thing we're told is about economy -- what what's the story here.
Well from my perspective.
The the holes equation it's really quite simple it's the perceived supply.
Against the perceived demand.
That's what yields the oil price now with respect to demand we all know demand is down.
In this country -- down almost well about 10%.
Year over year you're over two years in terms of how much we use every day.
And that's largely neutral price driven people just aren't gonna pay the high prices they're required to pay.
China demand is not growing as strongly as people -- expected because the economy's not as strong and in Europe demand is way down.
Because the economy is way down so all things considered we should not be at 92 dollar -- we should be at about 72 dollars.
Except for the geopolitical uncertainties in the Middle East number one in and that's continuing I think -- put a price floor.
Number two is the quantitative easing by the Fed.
Which people expect to improve the economy.
Which also puts a new floor under the oil price -- so it's artificial this kind of artificial realities we keep the price high and if it does -- a bit more.
As soon as economy shows any strength it's coming back up.
I think it's you know it's engine because they're brought up the issue of the dollar because -- -- in the market that we always watch.
Oil and the dollar it always goes in side by side but here's the thing member neck is trying to prop up the US economy helped the US economy.
Still you know you've got these prices that are saying at these as you're saying elevated levels but talking about seventy to 73 dollars a barrel on mean that seems.
Frankly you're -- in the world right now little bit low especially considering what we're -- between Iran and Israel.
Well that's that's the inflation of the geo political uncertainty remember it all comes back to perceptions.
But if you're looking at the absolute real demand.
It's down in the US it's down in Europe and it's not going up as high as people thought it would in China.
That should lead to about a 20/20 5% correction over an inflated price but it's not.
And and the longer we think that we can hold on to this kind of a price level which we -- if the economy actually really does improve.
If demand approved in the US of demand approved in China -- be over triple digits and and and a matter of weeks.
Let's hope the economy approves but here's the real issue.
The US as the largest consumer of the world has got to do more to take care of its own domestic needs through domestic production.
You know we have not made any progress to speak of right under federal leadership in the last three years we have made progress under state leadership.
What we need is federal leadership to open up new areas for expiration of production.
-- and we also need to take natural gas and convert that to a transportation fuel ever really -- address the underlying wet blanket on the economy which is high gas prices.
And those are things that in -- mean obviously the president continued to make that change -- -- give us something else there's been a Lotta reports are out the last couple of weeks in particular about stockpiling.
That is happening in China and if that economy does rebound it in the fourth quarter of this year which is very possible John.
What does that do to prices.
I don't think it drops prices I think it just perhaps slows the increase of prices but only until the stockpile is used up.
Remember China five years ago six years ago used about five million barrels today.
Today they're up to 10 X 20 fifteen they could be a fifteen million barrels a day.
And that's a tripling of oil demand over about a decade and a half.
That's a lot of new demand and so the stockpiling of a few hundred million barrels is not gonna make that much difference over time when the demand is that high.
It is it's a fascinating story and a -- lose every single week as we've seen with prices and with politics as well just -- -- to John thank you get the CEO.
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