Is it time for the U.S. to start exporting oil (NYMEX:CLF14)? OK, maybe it is not the best question to ask after a 10.6 Million barrel weekly drawdown in supply, but it is a question that should be raised. The U.S. oil boom is creating a situation where the U.S. will soon become the world's largest oil producer. Yet the U.S. of course does not export oil mainly because of the Arab Oil Embargo of 1973 except for a few select friends. But with our sudden abundance of crude oil, is it time to lift the crude oil restrictions?
Now, many may be against this. Environmentalists for one, but they seem to be against almost everything. They make me feel guilty when I exhale because I am releasing CO2 into the atmosphere. Some U.S. manufacturers are against it because they like the competitive advantage they see with a crude cost that is way below what we are seeing in other parts of the globe. The truth of the matter is that if we try to hoard our oil, it will not only do the global economy a disservice it will really be hurting ourselves.
As we should have learned, the global economy makes us a lot more dependent on others whether we like it or not. The free flow of goods and services will only stand to make our economy stronger. Instead of OPEC calling the shots on global supply, the U.S. with its oil loosen OPEC's grip on the market and allow market forces to determine price. The U.S. will be a major global hub for the global oil market. Not only will they be a major consumer, they will be a major exporter and major importer. We will see oil coming and going.
The U.S. is now a major exporter of oil products for the first time since the 1940s and it is already having a positive impact on our economy. U.S. refiners are thriving and our once insurmountable trade deficit is falling, and that is creating jobs here in the USA. The free flow of oil to where it is needed will help equalize the volatility that we have seen in the oil market that has done more damage to the economy than higher prices.
Exxon Mobil is also backing U.S. exports by pointing out that by 2015 energy companies will tap more oil in North America than ... the Petroleum Exporting Countries except Saudi Arabia, Exxon projects. With those types of numbers it is crazy not to unleash U.S. oil on the global market, which would help not just our neighbors but really be helping us.
Crude oil stunned some with a 10.59 million barrel drawdown, yet the build in products and evidence that the crude draw wasn't that big caused oil to sell off. Gas supply rose by a whopping 6.72 million barrels and distillates up 4.54 million barrels. The crude draw was most likely overstep by fog In the Houston Channel and yearend tax drawdowns. The Brent-WTI spread unwinds should slow, so WTI may have hit the top! Double top at yesterday's high as a matter of fact may be an area to look at.
Nat gas (NYMEX:NGF14) today should see an 88 withdrawal in this week's report! Next week maybe 300! If nat gas breaks, maybe buy as we are seeing one of the deepest freezes in recent memory.