CHERYL: OIL SLIDING AT THIS
HOUR.
TAKE A LOOK AT THIS, WT IRK,
$86.31, DOWN 18% IN THE CURRENT
QUARTER.
AFTER CHINA ENFORCED MORE COVID
LOCKDOWNS TODAY, SENDING A SHOCK
TO THE ENERGY MARKETS WITH
DEMAND FEARS IN THE DRIVER’S
SEAT.
THE PRICE OF BLACK GOLD ALSO
BEING PUSHED LORE ON AN
ANNOUNCEMENT FROM THE WHITE
HOUSE THAT THE G7 FINANCE CHIEFS
ARE MEETING TOMORROW TO DISCUSS
CAPPING THE PRICE OF RUSSIAN OIL
TO CURB PRESIDENT PUTIN’S MAIN
SOURCE OF REVENUE.
AND OPEC+ DROPPED ITS LATEST
REPORT THAT REVEALS SUPPLY IS
TIGHTER THAN EXPECTED WITH ONLY
400,000 BARRELS A DAY THIS
SURPLUS AS A RESULT OF
UNDERPRODUCTION FROM SEVERAL OF
ITS MEMBERS.
SO WITH ALL OF AT HAND AND A
POSSIBLE IRAN NUCLEAR DEAL ON
TABLE THAT WOULD RELEASE
MILLIONS OF BARRELS INTO
CIRCULATION FROM IRAN, WHERE DO
THE ENERGY MARKETS GO FROM HERE?
IN A FOX BUSINESS EXCLUSIVE IS
LIPOW OIL ASSOCIATES PRESIDENT,
ANDY ANDY LIP HOW. -- ANDY
LIPOW.
YOUR OVERALL TAKE ON THE
PRESSURE ON THE WTI CONTRACT.
DRIVERS RIGHT NOW ARE LIKING
THIS.
I DON’T KNOW ABOUT INVESTORS,
BUT DRIVERS LIKE IT.
>> WELL, CERTAINLY, THE CONSUMER
BENEFITS FROM THESE LOWER OIL
AND GAS ENLEAN PRICES.
THE THE NATIONAL RETAIL AVERAGE
RIGHT NOW IS $3.82.
I EXPECT THAT BY MID SEPTEMBER
THAT’S GOING TO DROP TO $3.70.
AND BEFORE HALLOWEEN WE’RE GOING
TO GET TO $3.50 A GALLON BECAUSE
THERE’S SO MUCH PRESSURE ON THE
OIL MARKETS DUE TO, THE AS YOU
JUST MENTIONED, THE COVID
LOCKDOWNS IN CHINA AS WELL AS
RECESSION FEARS IN EUROPE DUE TO
THE HIGH EMERGENCY PRICES.
CHERYL: AND ALSO I MENTIONED
THIS AS WE WERE GEARING UP TO
SPEAK TO YOU, NOT JUST THE IRAN
NUCLEAR DEAL, BUT ALSO WHAT’S
GOING ON IN EUROPE.
AND IN PARTICULAR WITH NORD
STREAM AND THE RUSSIAN-EUROPE
SHUTDOWN.
TALK ABOUT THAT BECAUSE, YOU
KNOW, THE CONCERN FOR WESTERN
EUROPE IS IT’S GOING TO BE NOT
ONLY JUST A COLD WINTER, BUT
IT’S GOING TO ADD TO THEIR
RECESSION OVER THERE.
>> RIGHT.
WELL, WE’VE ALREADY SEEN THAT
NORD STREAM II PROJECT
COMPLETELY CANCELED, AND TODAY
MORD CAN STREAM I, WHICH
SUPPLIES ABOUT ONE-THURSDAY --
ONE-THIRD IS SHUT DOWN UNDER THE
PRETENSE OF MAINTENANCE.
AND, OF COURSE, RUSSIA IS USING
ENERGY AS A WEAPON AGAINST THE
EUROPEAN UNION IN RESPONSE TO
THE E.U.’S SANCTIONS ON ARE YOU
SHOULD SHAH.
AS A -- ON RUSSIA.
AS A RESULT, WE’VE SEEN NOT ONLY
NATURAL GAS PRICES SPIKE, BUT
ELECTRICITY PRICES SPIKE AS
WELL.
THEY’RE PAYING IN EUROPE EIGHT
TIMES WHAT WE ARE FOR NATURAL
GAS AND ABOUT FOUR TO FIVE TIMES
THAT FOR ELECTRICITY.
AND YOU SEE TRANSLATING TO LOWER
INDUSTRIAL PRODUCTION.
IF WE WERE TO LOOK AT FERTILIZER
INDUSTRY, 70% OF IT IS SHUT DOWN
IN EUROPE.
CHERYL: YEAH.
WELL, CERTAINLY, YEAH.
BECAUSE, OBVIOUSLY, UKRAINE AND
RUSSIA ARE MAJOR MANUFACTURERS
OF FERTILIZER.
AMERICAN FARMERS HAVE BEEN
COMING ON TO OUR AIR AND TELLING
US ABOUT THAT SHORTAGE FOR THEM,
WHICH HAS BEEN VERY DIFFICULT.
WHAT ABOUT IRAN?
YOU KNOW, MANY FOCUS DON’T THINK
WE SHOULD GO BACK -- FOLKS DON’T
THINK WE SHOULD GO BACK INTO THE
IRAN NUCLEAR DEAL.
BUT PRESIDENT MACRON OF FRANCE,
HE WANTS IT.
THE U.S. IS STILL ON THE
SIDELINES IN THESE NEGOTIATIONS.
WHAT WOULD IT MEAN TO HAVE
IRANIAN OIL BACK INTO THE
MARKETS?
>> WELL, FIRST OF ALL, IRAN HAS
ABOUT 100 MILLION BARRELS OF OIL
IN FLOATING STORAGE ON TANKERS
THAT COULD BE DELIVERED RATHER
QUICKLY AND ANOTHER ESTIMATED 40
MILLION BARRELS OF OIL IN
STORAGE ON LAND.
SO THEY REALLY COULD FLOOD THE
MARKET QUITE QUICKLY AND,
ACTUALLY, THAT WOULD BENEFIT
CONSUMERS TO THE DETRIMENT OF
RUSSIA BECAUSE NOW IRAN WOULD BE
COMPETING WITH RUSSIA FOR THOSE
CUSTOMERS MANY ASIA.
IN ADDITION, WE WOULD EXPECT
THAT IRAN WOULD BE ABLE TO
INCREASE THEIR PRODUCTION BY
OVER A MILLION BARRELS A DAY
OVER THE NEXT COUPLE OF MONTHS,
AND ONCE AGAIN THAT WOULD CUT
INTO THE SUPPLY DISRUPTION THAT
WE’RE SEEING FROM RUSSIA AT THIS
TIME.
CHERYL: ANDY, REAL QUICK ARE
BEFORE I LET YOU GO, THE EASY
QUESTION BUT PROBABLY THE
HARDEST ONE AS WELL, OIL PRICES.
WHAT’S YOUR LONG-TERM FORECAST
RIGHT NOW?
IN WELL, I THINK THAT OIL PRICES
WHILE THEY’RE UNDER PRESSURE
TODAY, THEY ARE GOING TO DRIFT
UP BECAUSE IT IS A SUPPLY ISSUE,
AND YOU NEED THESE HIGHER PRICES
TO SIMPLY GET MORE OIL OUT OF
THE GROUND.
CHERYL: OKAY.
WELL, I REMEMBER $40 A BARREL,
BUT I ALSO REMEMBER $140 A
BARREL, SO SOMEWHERE IN THE
MIDDLE MIGHT BE OKAY.