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-- you're wondering how much Europe's debt woes and the Euro or impacting us here in the US just take a look at the price of oil.
Crude -- taken a dive of around 18 bucks a barrel from its highs over just the last two weeks some rather unprecedented volatility for oil.
Joining us now from Denver -- Tom Petri vice chairman for energy and power investment banking and Bank of America Merrill Lynch.
Tom is the recent price drop all about confidence and expectations.
Or is it more related to some obscure Euro dollar currency move.
I think it's some of beach but I think the latter is a very important element here.
And it it's it's not that it's obscure but it's certainly indirect in the essentially.
All of those things you're talking about early of the feedback of of the Euro problems potentially coming back into the US economy in the Chinese economy.
Raises real questions then on the supply demand side.
So -- -- I do think that linkage between oil and the prospects for the Euro looking out over the next 123.
Maybe six months.
May become -- the dominant factor we're dealing with it's ironic to think about it.
Less than two weeks ago we had a well in the high eighties and the next step was if oil got above ninety OPEC would have been thinking about cutting.
About what they can do to put more oil on them on the market and bring it down and here they -- they're gonna have to start thinking about.
-- if we get in that test into the sixties in the low sixties -- -- -- -- -- -- -- More oil into the Gulf of Mexico listen lot of groups see you go to some of the the groups like the Sierra Club -- -- -- calling for a ban or at least -- stop -- offshore drilling.
-- we figure out what the -- -- You know when you look at it and if some of these groups and if it goes on the gonna gain some traction they're gonna gain an -- year in the White House.
Theoretically couldn't this reduce the amount of oil available to US consumers if we slow or stop offshore drilling -- Why haven't we seen a pop in the price as more people say hey let's cut back on offshore drilling -- oil higher.
Well we've got we've got enough oil in storage and with the high -- relatively high prices we've had for the last year -- so.
But some were in a position where.
If there's a lag before those factors take in that you're talking about Brian.
Yes -- -- out they are two to four years from now.
Then net effects of this will be to tighten up supply demand relationships.
But not in 2010.
Your banker Tom we see a lot of oil services deals done in the last twelve to 24 months or so.
What are your clients telling you -- people on hold are they are they retrenching right now to figure out exactly what the legislative and policy response is going to be.
We're sure the energy policy side of well what's happening here.
Is a black box at this point.
And you know there is a very clear argument that.
That if you if you ban offshore drilling you really haven't reduce the oil spill risk.
You still going to be bringing oil in on an imported basis and it won't be the catastrophe.
And individuals like tanker spills not -- -- pass -- -- that we now have.
But it's still -- still exposure.
So we need we need a pretty calm.
Assessment of what what were really doing as we think over the next three to five years.
And unfortunately the precedent.
Is not encouraging as to what -- public response -- -- on the so quickly your your point is that the people are calling for a demand -- us stoppage or a deferral of offshore drilling may be missing the point.
That we could theoretically run just as much risk of another Exxon Valdez from imported Saudi or Nigerian oil.
As we are -- offshore disaster like we had the gulf.
-- there that that isn't the real possibility.
Quite clearly coming out of this there are steps that need to be taken to ensure.
That the blow up for better that's in place is functional.
And that we don't get a disaster like we've got here.
But but that's a lot different than banning offshore access offshore oil.
Tom -- always a pleasure -- SP.
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