JOINING ME NOW FOX BUSINESS
CONTRIBUTOR PHIL FLYNN.
PHIL, GREAT TO SEE YOU.
GETTING A LITTLE WORRIED ABOUT
OIL PRICES HERE AND THE EFFECT
ON GAS PRICES.
TELL US WHAT’S GOING ON IN THE
MARKET RIGHT NOW.
>> I DON’T THINK YOU’RE WRONG.
THERE’S A LOT OF PEOPLE -- MY
PHONE CALLS HAVE BEEN GOING OFF
THE HOOK TODAY LIKE WHAT THE
HECK IS GOING ON.
AND WHAT WE’RE SEEING HERE IS A
SITUATION WHERE GLOBAL DEMAND IS
COMING BACK FASTER THAN SUPPLY.
YOU KNOW, IT’S KIND OF
INTERESTING YOU MENTIONED
GEOPOLITICAL TENSIONS.
THERE’S ABSOLUTELY NO DOUBT THAT
GEOPOLITICAL RISK FACTORS FOR
THE OIL MARKET HAVE GONE UP.
AND A LOT OF THAT IS BECAUSE THE
U.S. HAS PULLED BACK FROM BEING
A MAJOR OIL PRODUCER.
YOU KNOW, IN RECENT YEARS WHEN
THE U.S. WAS THE BIGGEST
PRODUCER IN THE WORLD, YOU HAD
THESE DISRUPTIONS, THE HOUTHI
REBELS, FOR EXAMPLE.
THEY SHOT A MISSILE INTO THE
UAE.
YOU HAVE THESE TEXS, AND THE --
TENSIONS, AND THE OIL MARKET
WOULDN’T MOVE.
BUT NOW BECAUSE U.S. PRODUCERS
PULL BACK, SUPPLIES ARE TIGHT.
WHEN THESE THINGS HAPPEN, PRICES
SOAR.
BRIAN: PHIL, I WANT TO POINT TO
THAT AGAIN AND AGAIN, AND I WANT
YOU TO EXPAND ON THAT BECAUSE
THIS IS THE STORY: YOU ALWAYS
GET GEOPOLITICAL TENSIONS.
THERE’S ALWAYS SOMETHING GOING
ON, RIGHT?
BUT WHEN THE U.S. IS FULLY
ENGAGED IN THIS THESE MARKETS
AND PRODUCING, IT MUTES A LOT OF
THOSE EFFECTS.
BUT THE U.S. PULLBACK, THE
CHILLING EFFECT ON INVESTMENT
THAT WE’VE GOTTEN -- AND, LOOK,
IT’S COME WITH THE BIDEN
ADMINISTRATION -- THAT IS THE
STORY, PHIL.
AND, PHIL, THAT’S GOING TO BE
THE STORY NOW FOR HOW LONG?
THIS IS WHAT’S GOING TO DRIVE
MARKETS.
>> UNTIL THE BIDEN
ADMINISTRATION SENDS THE SIGNAL
THAT THEY’RE GOING TO CHANGE
COURSE.
LISTEN, THERE’S A LOT OF THINGS
THAT HAPPENED WITH THE PANDEMIC.
WE KNOW THAT, RIGHT?
WE KNOW ABOUT THE SUPPLY CHAIN,
ALL ABOUT THAT.
BUT THE MOST CHILLING THING THAT
HAPPENED IN THE GLOBAL MARKETS
WAS WHEN THE BIDEN
ADMINISTRATION BASICALLY SAID
THAT THE U.S. IS GETTING OUT OF
THE OIL BUSINESS, RIGHT?
YOU KNOW, RIGHT AFTER HE BECAME
INAUGURATED, YOU KNOW, WITHIN
HOURS, LET’S CANCEL THE KEYSTONE
PIPELINE, WE’RE GOING TO PUT ON
DRILLING MORATORIUMS.
AND WHEN WE NEED MORE SUPPLY,
WE’RE GOING TO LOOK TO OPEC, AND
THE INVESTMENT HIT THAT THE U.S.
INDUSTRY HAS TAKEN, IT’S GOING
TO BE FELT FOR YEARS TO COME.
AND BECAUSE OF THAT, WE’RE
SEEING THESE TIGHT SUPPLIES.
BRIAN: SO, PHIL, YOU GOT THE
INVESTMENT HIT, SUPPLY HAS
PULLED BACK.
IT’S PROBABLY NOT GOING TO COME
BACK.
NOW YOU’RE SEEING THESE HIGHER
PRICES.
THE PRESIDENT AND HIS
ADMINISTRATION ARE FLOATING ONCE
AGAIN THE IDEA OF RELEASING
STRATEGIC PETROLEUM RESERVES
WHICH THEY DID JUST A COUPLE OF
MONTHS AGO.
TALK ABOUT WHAT THAT, WHAT
DIFFERENCE THAT MAKES, IF ANY,
IN THE OIL MARKETS AND GAS
PRICES THAT WE’RE GOING TO SEE
GOING FORWARD.
>> IT REMINDS WE OF OLD ADAGE,
BRIAN, IF AT FIRST YOU DON’T
SUCCEED, TRY, TIE AGAIN.
[LAUGHTER]
-- TRY, TRY AGAIN.
WE JUST RELEASED 50 MILLION
BARRELS FROM THE STRATEGIC
PETROLEUM RESERVE.
THAT WAS SUPPOSED TO SOLVE ALL
OUR PROBLEMS, IT WAS SUPPOSED TO
SEND A MESSAGE TO OPEC THAT
WE’RE GOING TO CLAMP DOWN ON
THEM, AND IT DID NOTHING,
NOTHING FOR GASOLINE PRICES.
BUT EVERYBODY SAYS, WELL,
GASOLINE PRICES WENT DOWN A
LITTLE BIT.
THAT HAD NOTHING TO DO WITH THE
RELEASE FROM THE RESERVE BECAUSE
THAT OIL NEVER WENT TO REFINERS.
THAT HAD EVERYTHING TO DO WITH
OMICRON.
SO THE BIDEN ADMINISTRATION IS
JUST SQUANDERING TAXPAYERS’
MONEY BUT FEEDING BARRELS OF OIL
INTO THE GLOBAL MARKET THAT THEY
WANT AND THEY’RE GOING TO BUY AT
A DISCOUNT, BUT WHAT’S GOING TO
HAPPEN WHEN OUR SUPPLIES ARE SO
TIGHT WE ARE ACTUALLY GOING TO
NEED THOSE SUPPLIES?
WE’RE GOING TO PAY A HIGHER
PRICE FOR IT.
IT’S GOING TO BACKFIRE, AND IT
ALREADY HAS.
BRIAN: IT’S BAD POLICY THAT
TEARS UP, YOU KNOW, THE SEEDS OF
OIL PRODUCTION AND ENERGY
INDEPENDENCE.
IT TEARS THOSE UP, AND THEY
DON’T GROW, AND YOU FEEL THAT
YEARS AND YEARS DOWN THE ROAD.
PHIL, IN THE MEANTIME, WE END UP
LOOKING TO OPEC.
WE END UP GOING TO OPEC AND
SAYING, PLEASE, WILL YOU PUMP
MORE OIL.
PHIL, DO YOU SEE ANY CHANCE THAT
ANY OF THOSE SUPPLIERS IN THE
MIDDLE EAST ARE GOING TO STEP UP
AND TRY TRY TO MEET THAT DEMAND
IN THE COMING YEAR?
>> THEY’RE NOT GOING TO, AND
SOME BELIEVE THEY CAN’T, YOU
KNOW?
THEY LOOK AT THE FACT THAT OPEC
RIGHT NOW IS HAVING A HARD TIME
MEETING THEIR QUOTA.
WE JUST HEARD TODAY THAT RUSSIA
IS SAYING WE’RE HAVING
PRODUCTION ISSUES ON OUR END, WE
MIGHT NOT BE ABLE TO RAISE
PRODUCTION BY THE PROMISED
100,000 BARRELS A DAY.
AND PART OF IT IS TO SAUDI
ARABIA WHO HAS MOST OF THE SPARE
PRODUCTION CAPACITY IN OPEC AND,
LET’S FACE IT, THEY DON’T GET
ALONG WITH THE BIDEN
ADMINISTRATION.
SO I THINK AS LONG AS SAUDI
ARABIA’S IN CONTROL, I’M NOT
EXPECTING OPEC TO DO MUCH.
BRIAN BROIP THIS IS NOT A GOOD
NEWS STORY, OF COURSE.
NOBODY WANTS TO HEAR GAS PRICES
ARE GOING UP, BUT IT’S IMPORTANT
TO UNDERSTAND THE LONG-TERM
EFFECTS OF THE SYSTEMATICALLY
TRYING TO UNDERMINE A KEY
INDUSTRY IN THIS COUNTRY.
PHIL, WE REALLY APPRECIATE YOU