This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Relax Restrictions on Crude Exports, Says Exxon, Conoco? Just Say No!

Stocks in this article: CLR COP EOG XOM

NEW YORK (TheStreet) -- If there was ever a case to keep the U.S. ban on oil exports alive, we've seen it in the last six months. We are producing more oil and using less of it, yet the price of gasoline is currently an average of $3.50.

Recently big oil companies have been lobbying government to lift export bans on all crude oil. Since January of this year, we have broken our own records for reserves several times. One might think that would be a strong case for the lifting of such a ban.

Oh, on the contrary, my friends.

Read More: Why Yahoo's Marissa Mayer Is 2014's Top CEO By a Landslide

We've seen nothing but higher prices built upon fear of other countries' geopolitical problems. Despite the fact that we still have huge reserves -- and gasoline reserves continue to build -- prices have done nothing but increase.

Herold Hamm, CEO of Continental Resources (CLR - Get Report) has been at the forefront of drillers petitioning the government to lift the ban on WTI crude exports. Continental Resources, EOG (EOG), ExxonMobil (XOM), Conoco Phillips (COP - Get Report), and the American Petroleum Institute have all come out against the ban.

An end to the ban would would lead to untold profits. Almost all of these companies are seeing record profits already, but it's not enough for them. They want the ability to sell to the global market and to the highest bidder. They argue that this would lead to more production and more jobs. I would argue that it would lead to a more volatile market that is susceptible to all global turmoil on perceived supply and demand.

There would be no spread on WTI vs. Brent crude oil, which would move together at every skirmish that pops up.

And there are lots of those skirmishes. You know all the headlines. Iraq, Ukraine, Libya and even Iran have all put fear into the markets. The irony is that of all of those countries, we've actually got an increase in oil from Iraq, Libya and Iran, due to loosening sanctions.

Read More: 40% Would Quit Their Jobs for Better Health Care

U.S. production is very near all-time highs. Gasoline stockpiles continue to climb, as U.S. consumption continues to decline year over year. Iraq actually increased its output despite the northern occupation of ISIS. Libya, which was not expected to produce anything, is getting out about 3.4 million barrels a day. Iran, which largely disregarded earlier sanctions, is ratcheting up its production every month. The conflict between Ukraine and Russia hasn't slowed down one barrel of oil. In fact, Barack Obama has repeated that any future sanctions against Russia will avoid disruption of the oil markets.

People will argue that West Texas Intermediate crude oil inventories actually declined for the second straight week.

This is true. But why?

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs