That was the key point of last week’s essay. I told you the U.S. Commerce Department could soon lift the ban on exporting crude oil from the U.S.
This would allow U.S. crude-oil exports to rocket higher – along with oil companies’ share prices.
Despite the benefits, many Americans are against lifting the ban. They worry it will cause U.S. gasoline prices to rise as our domestic crude oil supply drops, which will hurt America.
[ad#Google Adsense 336×280-IA]But one oil expert says the skeptics are wrong.
Not only will lifting the ban be good for America, it’ll be good for U.S. gasoline prices…
Daniel Yergin is an acclaimed author, speaker, and economic researcher.
He is also one of the top experts on the oil industry.
His Pulitzer Prize-winning book, The Prize: The Epic Quest for Oil, recounts the struggle for wealth and power that has always surrounded oil.
Yergin also has a great track record when it comes to making predictions about the oil industry.
For example, when the world was worried about “Peak Oil” a few years ago, Yergin said human knowledge and technology would rise to the occasion – just like it did the other four times since the 1880s when there was widespread fear of the U.S. running out of oil. He was right. U.S. oil production has soared over the past few years as new technologies have allowed us to tap into incredible oil and gas reserves. Crude oil production has increased 50% from 2008.
In short, when Yergin talks about the oil industry, I listen.
As I told you last week, Yergin said he believes the U.S. crude oil export ban could soon be lifted. In the 1970s, it became illegal to export oil from the U.S.
In short, Yergin says all the reasons the ban was in place originally – to prevent Alaskan crude oil from going to Japan and to facilitate oil-price fixing – are now gone. We quit fixing oil prices in the 1980s and began exporting oil to Japan around the same time. In other words, the law is merely an antiquated shell that needs to be removed.
Lifting the ban would be great for U.S. oil companies. U.S. crude-oil exports would rocket higher – along with oil companies’ share prices.
And despite what many Americans believe, Yergin says an increase in U.S. oil exports will also cause gasoline prices to fall.
You see, the world’s energy demand is growing. But as we’ve told you in these pages before, international oil companies are having trouble finding economical oil outside the U.S.
When the U.S. is allowed to export oil, U.S. oil companies will do everything they can to take advantage of cheaper domestic crude-oil prices and high crude oil demand elsewhere in the world.
That’s why Yergin believes U.S. oil production will soar to as much as 14 million barrels of oil per day after the ban is lifted. The U.S. produced just 7.4 million barrels of oil per day in 2013. This will greatly increase the supply of oil in the world market. And more oil in the world market will reduce oil prices globally… leading to a decrease in gasoline prices at home.
Don’t believe the skeptics. When the ban is lifted, oil companies’ share prices will soar… And gasoline prices will fall. And that’s good for America.
Source: Growth Stock Wire