The price of oil continues to drop. It will be interesting if it holds above $90.
A few minutes ago Maria Bartiromo on CNBC noted that oil was down today and related it to
the fact that the US
will be self-sufficient in oil in the near future, and implied that was
the reason for the price of oil dropping. Actually she misspoke: the US won't be self-sufficient in oil, but North America will be.
I doubt the price of oil is down today for the reason Maria suggested. She may be correct; I just don't think so: I don't think the price of oil is down today for the reason she stated.
But if /when
North America does become self sufficient, it will be interesting how OPEC
adjusts. OPEC can cut back on production but it will only affect the
price of oil in their markets (Europe, Asia). If the US does not allow
oil to be exported, the price differential between OPEC and WTI should
widen, to the US' advantage.
It is interesting that Canada may be
making a mistake trying to sell their oil to the US when they might be
able to do better selling oil to Asia.
Possibly the biggest loser: Venezuela. They will be competing directly with Saudi Arabia, Iraq, Kurdistan, and Iran.
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