CASPER, Wyo. — Ending a ban on crude oil exports could help boost prices in the long-term but do little in the short-term, oil industry executives who do business in Wyoming said.
Oil prices are down by about half compared to last year. The U.S. House recently voted 261-159 to end the ban on U.S. oil exports. The legislation still would need to clear the Senate and president to become law.
Critics say allowing exports could lead to higher gasoline prices in the U.S. Supporters say it would give American oil companies access to new markets and higher prices.
The move probably would have more of an effect long-term, Joseph DeDominic of Anschutz Corp. told the Casper Star-Tribune.
“I don’t think short-term a couple dollars is going to change our decisions or someone else’s,” DeDominic said.
U.S. crude often sells below the global price. Brent, the benchmark for international crude, saw trading of roughly $50 a barrel Friday. American crude stood around $47 a barrel.
An indirect price lift could result from lifting the ban, said Jack Vaughn, CEO of Peak Powder River Resources, a Durango, Colorado-based company active in Wyoming.
“I’m not saying it moves the floor enough to set off another boom, but it helps,” Vaughn said.
Companies in Wyoming are unlikely to sell directly overseas. Instead, the benefit would come in easing a supply glut at Cushing, Oklahoma, the largest commercial storage hub in the U.S.
Companies in states such as Texas would sell directly overseas, reducing the bottleneck at Cushing and strengthening U.S. prices.
Oil production in Powder River Basin is teetering around the break-even point, said David Ballard, president of Billings, Montana-based Ballard Petroleum.
Even a slight increase in oil prices could help spur more production because it would reduce the risk of investing in new wells, Ballard said.
Information from: Casper (Wyo.) Star-Tribune, http://www.trib.com
This article was from The Associated Press and was legally licensed through the NewsCred publisher network.