Seeing the oil glut in its native country U.S, ConocoPhillips (NYSE:COP) said it wants to supply U.S oil to global market and once again asked the regulatory authorities to lift the ban on oil exports.
Chief Executive Officer, Ryan Lance, on Monday in Kuala Lumpur said increase in the U.S shale production activity have resulted in excess of light-sweet crude, as shale production is more than the demand from oil refineries. He further added the export of oil would benefit consumers, as it would assist in lowering of domestic as well as overseas gasoline prices.
The removal of ban would bring the U.S oil exporters like Conoco in the line of largest global oil exporters, while at present OPEC organization dominates the supply of oil to markets like Asia and Europe.
“We could be a stable supplier of crude to the global markets,” Lance said. “If you want to reduce the cost of gasoline to U.S. consumers, put oil into the market to stabilize the global price.”
Based on government-supported study, U.S oil exporters will be among top tiers of the oil exporting countries if domestic oil production sustain high levels and regulatory bodies removed the four-decade ban that doesn’t permit majority of crude from going outside of U.S.
Lance joins hands with Harold Hamm of Continental Resources Inc. and John Hess of Hess Corp. which are also putting pressure on U.S government to lift the ban on oil exports as the nation’s oil storage is flooded by production activity from shale formations like the Eagle Ford in Texas and Bakken in North Dakota.
U.S government allowed oil drillers last year to export lightly processed crude, known as condensate. This upheld raised a point in oil exporters’ mind that government is possibly considering to lift the ban on oil-export.
The oil production remained at 9.37 million barrels a day in the week ended May 8, according to data provided by the Energy Information Administration. If we go back to month of March the average production of oil stood at 9.42 million a day in the week ended March 20, that production activity bested the fastest pace the oil production activity gain since at least January 1983.
Since last December the oil drilling activity was drastically slowdown, by 58 percent, until March when global oil starting to restore and oil prices has bounce back from six-year low in March. But the production activity is again recovering supporting oil glut so whether oil recovery continues or not, it is now undecided.
“We don’t use a particular price when we think about the future,” Lance said. “We see a gradual rise in prices but we see a lot more volatility. We may see a $100 a barrel world. The fear is that if we see that, we’ll see a $50 on the other end of that quite quickly.”
