MARIA: WELCOME BACK.
CRUDE OIL KEEPS ON MOVING WITH
OIL UP SIX OF THE LAST EIGHT
JOINING US RIGHT NOW IS TOM
KLOZA.
GOOD TO SEE YOU THIS MORNING.
>> YEAH, I THINK SO.
I MEAN, THE HOT QUARTER IS THIS
QUARTER AND THE NEXT 40 OR 50
DAYS ARE THE WILD 40 OR 50 DAYS.
IT COULD BE TUGGED UP BY HIGHER
GAS LINE PRICES OR IT COULD GO
UP WITH MORE RHETORIC INVOLVING
IRAN.
I MEAN, IF WE REALLY DO TRY TO
SQUEEZE IRAN AND SQUEEZE A
MILLION BARRELS A DAY OUT OF THE
MARKET OR EVEN MORE, BASED ON
SOME OF THE STATEMENTS, OIL
PRICES ARE GOING TO GO HIGHER.
I WOULDN'T BE SURPRISED TO SEE
BRENT PRICES AROUND $85, AND THE
U.S. CRUDE PROBABLY GET CLOSE TO
THAT, ABOUT $80.
BUT IT REALLY ALMOST NEEDS TO
HAPPEN IN THIS QUARTER.
WE'LL GET A BREAK AFTER THAT AND
THEN 2019 WE START IT ALL AGAIN.
MARIA: SOMEBODY MADE THE POINT
THIS WEEKEND THAT SOMEONE
THIS WEEKEND THAT OOMEONE
THIS WEEKEND THAT ONEEONE
THIS WEEKEND THAT ONE ONE
THIS WEEKEND THAT ONE OFE
THIS WEEKEND THAT ONE OF THE
PEOPLE ARE WORRIED THE SANCTIONS
ARE CUTTING BACK PRODUCTION IN
LOTS OF OIL-GENERATING
COUNTRIES.
>> YEAH, WELL, THE SANCTIONS IN
IF YOU GO BACK TO 2011 TO 2014,
YOU HAD SANCTIONS ON IRAN AT THE
END OF THAT PERIOD.
THAT REMOVED MORE THAN A MILLION
BARRELS A DAY OF CRUDE FROM THE
BETWEEN $450 BILLION AND
$480 BILLION FOR OUR GAT
$480 BILLION FOR OUR GASOLINE
THEN.
STILL ABOUT $90 BILLION MORE
THAN WE PAID IN 2016.
SO IT IS EXPENSE
SO IT IS EXPENSIVE AND PEOPLE
ALMOST HAVE AN INTERNAL
THERMOSTAT AS TO HOW MUCH THEY
SPENT.
>> ONE OF THE QUESTIONS I HAVE,
WE SAW BEFORE WHEN THIS HAPPENED
THERE WAS A CHANGE IN BEHAVIOR
IN THE KINDS OF VEHICLES THAT
PEOPLE WERE BUYING.
WE'VE SEEN SOME OF OUR
MANUFACTURERS ELIMINATE ALL CARS
EXCEPT FOR SUVS.
WHAT KIND OF IMPACT DO YOU THINK
THIS WILL HAVE ON THE AUTO
GOTTEN A BREAK RECENTLY.
SOME OF THE STANDARDS THAT WERE
RELAXED A LITTLE BIT AND PEOPLE
ARE BUYING MORE SUVS THAN
INSTRUCTION.
COMMERCIAL WHERE THEY SHOW SOME
GUY IN A BIG TRUCK DELIVERING A
CALF OUT IN THE HINTERLANDS.
YOU DON'T NECESSARILY NEED BIG
TRUCKS AND BIG SUVS.
I LIKE TO URGE PEOPLE NOT TO
NECESSARILY LIVE LARGE WITH AN
AUTOMOBILE BECAUSE I THINK IT'S
THE OTHER ANSWER, MORE SUPPLY IS
AN ANSWER BUT LESS DEMAND IS AN
ANSWER AS WELL.
AMERICAN AS SOON AS OIL GETS TO
LOWER NUMBERS, THEY START BUYING
BIG AGAIN AND THAT'S WHAT THE
GET PEOPLE TO CHANGE THEIR
BEHAVIOR UNLESS OIL IS -- YOU
GOING TO GET TO $100, UNLESS WE
ACTUALLY HAVE LIKE MISSILES
FLYING IN THE PERSIAN GULF BUT
$90 OIL COULD CHANGE IT.
IT COULD ALSO CHANGE IF THINGS
GET A LITTLE TOUGHER.
THIS IS ABOUT AS GOOD AS IT GETS
AS GLOBAL ECONOMIES GO.
SO WE HAVE TO MEASURE EVERYTHING
FROM HERE AS MAYBE THE HIGH
STANDARD.
>> TOM, REAL QUICK, SO MUCH OF
THIS CONVERSATION OF LATE HAS
BEEN ANY KIND OF A SHIFT IN
DEMAND THAT COULD BE SOMETHING
THAT MODERATES THE SKYROCKETING
PRICE OF OIL.
>> THE SHIFT IS PROBABLY IN THE
UNITED STATES.
WE'RE GETTING A LITTLE BIT
FATIGUED WITH HIGHER PRICES
PARTICULARLY, ALL OF THE
COUNTRIES THAT ARE PRODUCING A
A LITTLE REVVED UP.
THAT IS SOMETHING TO WORRY
ABOUT.
IF YOU GET A SLOWDOWN IN GDP OR
ANY KIND OF SORT OF A MALAISE OR
A SLOG, THAT'S GOING TO KNOCK
DEMAND DOWN TREMENDOUSLY.
THIS MONTH, HOWEVER, I THINK
WORLD USES 100 MILLION BARRELS A
DAY OF CRUDE OIL.
MARIA: BIG NUMBER.