BY RAY HANKAMER
rhankamer@gmail.com
Speaker: David Pursell, Tudor, Pickering, Holt, & Co; Matthew Pilon, Simmons & Company; Robert A. Dye, Ph.D., Chief Economist Comerica Bank.
Takeaway: Production capability is slowing in most countries while worldwide consumption of petroleum products is holding steady or growing. Oil prices will rise this year.
Overview: Jobs and wages are growing in the US; India economy will surpass China in a few decades; if Britain leaves EU, other countries may follow
- US economy and consumer confidence growing; household net worth is rising; consumers are de-leveraging and building equity; we have returned to pre-recession peak of household net worth
- Recently approved oil exports will not matter much to overall pricing of this commodity
- Global oil demand growing at 1%+ per annum-not weak-while worldwide production is slowing
- 476 rigs working now, lowest count ever
- There is massive excess capacity in the oil patch; however. on-and off-shore drilling innovations and increased efficiency are resulting in falling costs of lifting a barrel of oil
- In-migration to Houston continues unabated and this requires schools, roads, hospitals, and other infrastructure-so Houston continues to grow
- We do not have a storage problem for excess crude, as is often reported in the press
- When asked to predict price of a barrel of oil at the end of 2016, the guesses were: $80, $50, & $80
