Share This Article

Facebook LinkedIn
Twitter Reddit
Print Email
Pinterest Gmail
Yahoo
Money Morning
×
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • AI Investing
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
  • Retire
    • Income Investing Guide
    • Retirement Articles
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    • Postcards
Login Archives Your Team About Us FAQ
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • AI Investing
    ×
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
    ×
  • Retire
    • Income Investing Guide
    • Retirement Articles
    ×
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    • Postcards
    ×
  • Subscribe
Enter stock ticker or keyword
×
Join 100,000+ Like-Minded Investors Today
Twitter
Tags: Energy Investing

The U.S. Oil Export Ban Is a Windfall for These Companies

By Dr. Kent Moors, Global Energy Strategist, Oil & Energy Investor • @KentMoors_OEI • July 7, 2014

View Comments

Start the conversation

Leave a Reply Click here to cancel reply.

You must be logged in to post a comment.

Dr. Kent MoorsDr. Kent Moors

After more than four decades, it looks like America is getting back into the oil export business again.

For the first time since the 1970s, Washington has opened the door to sending more U.S. crude abroad.

Of course, the United States has been exporting oil products for some time now.

In fact, America is now the largest exporter of products like gasoline, low-sulfur heating oil, and diesel fuel in the world.

But until now, companies were hamstrung when it came to the raw material itself.

Of course, there have been a few exceptions. Very heavy California crude, which has to be sold at a deep discount and for which there is not a ready domestic market, has received some permissions to export. In addition, a few tolling programs - where the raw material is exported out and finished products are imported back in - have been allowed.

But for the lion's share of what is pumped out of the ground at American fields, the domestic market has long been the only option.

This change in policy promises to open up new opportunities for investors...

U.S. Oil Exports: A Major Reversal in Policy

Late Tuesday evening, the U.S. Department of Commerce announced that it would allow exports of ultralight oil (essentially condensate after very minimal processing) by two companies -Pioneer Natural Resources Co. (NYSE: PXD) and Enterprise Products Partners L.P. (NYSE: EPD).

Both requested the exports from production at tight/shale oil plays in the Eagle Ford basin of South Texas.

As volumes go, this is a very small step. But it is a major change in policy (despite what the Commerce Department was trying to tell everybody yesterday). And that means other companies are certain to follow suit.

Earlier this year, Continental Resources Inc. (NYSE: CLR) Chief Executive Officer Harold Hamm said he expected an opening for across-the-board crude oil exports. And CLR just happens to be the largest producer in the Bakken.

After yesterday's announcement, we've now learned export permissions will certainly be granted on an ad hoc basis. These changes are now set to begin in August, marking the end to a restriction that was initiated for national security reasons during the Arab Oil Embargo of 1973.

Of course, some U.S. companies have already found a way to get around this restriction. It involves boiling the oil to take out some of the more easily separated gases in order to "stabilize" the crude.

As such, the oil has been initially "processed" without actually being refined. But the result is enough to qualify as an "oil product," which puts it in a category that is regularly exported.

The American Oil Boom Rolls On

Even so, this decision means we are rapidly moving into a new period in which straight crude oil exports will become more common. Companies will have to stipulate that sufficient volume remains available for domestic refining and to meet homegrown demand.

Yet, the largess of unconventional oil production in tight oil and shale basins nationwide means these potential issues will hardly become a problem.

In fact, I actually expect initial permissions for crude exports to come largely from shale operations. It is a rather direct way of addressing the increasing amount of quality crude coming from unconventional drilling.

And make no mistake: This is one boom that's just getting started. Even what were once considered low potential horizons are now producing oil.

The success of our first well in Money Map Project #1 is a good case in point. Our initial gusher came from a well drilled into the Buda Lime of south Texas.

The Buda Lime abuts the Eagle Ford and is located below the Austin Chalk, known to be a solid producer for decades. But until recently, the Buda Lime was never more than an afterthought.

Not any more...

And the Buda Lime is hardly the exception. Discoveries of new horizons with much greater potential than previously thought are underway in several major U.S. oil basins.

In short, there will be much greater oil production beyond what has been estimated. That would seem to put greater pressure on D.C. to allow oil exports.

How to Get the Biggest Bang for Your Buck

Here Are 10 “One-Click” Ways to Earn 10% or Better on Your Money Every Quarter

Appreciation is great, but it’s possible to get even more out of the shares you own. A lot more: you can easily beat inflation and collect regular income to spare. There are no complicated trades to put on, no high-level options clearances necessary. In fact, you can do this with a couple of mouse clicks – passive income redefined. Click here for the report…

Claim My Free Report

Dr. Kent MoorsDr. Kent Moors

About the Author

Browse Dr. Kent's articles |

Dr. Kent Moors is an internationally recognized expert in oil and natural gas policy, risk assessment, and emerging market economic development. He serves as an advisor to many U.S. governors and foreign governments. Kent details his latest global travels in his free Oil & Energy Investor e-letter. He makes specific investment recommendations in his newsletter, the Energy Advantage. For more active investors, he issues shorter-term trades in his Energy Inner Circle.

… Read full bio

Subscribe
Login
Notify of
guest

guest

1 Comment
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Charles Smith
Charles Smith
9 years ago

Dr. Moors

What do you know about Gulf Coast Western they have a number of leases
in the Buda area in Texas?

Thank You
C.L. Smith

0
Reply


Latest News

September 14, 2023 • By Tom Gentile

Tulips Are the Secret to Trading the Next 300% Rally in AI

September 14, 2023 • By Chris Johnson

Tulips Are Telling Me How To Trade the Next 300% rally in AI

September 14, 2023 • By Garrett Baldwin

This Is My Biggest Economic Fear
Trending Stories
ABOUT MONEY MORNING

Money Morning gives you access to a team of market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

QUICK LINKS
About Us COVID-19 Announcements How Money Morning Works FAQs Contact Us Search Article Archive Forgot Username/Password Archives Profit Academy Research Your Team Videos Text Messaging Terms of Use
FREE NEWSLETTERS
Total Wealth Research Power Profit Trades Penny Hawk Midday Momentum
PREMIUM SERVICES
Money Map Press Home Money Map Report Fast Fortune Club Weekly Cash Clock Microcurrency Trader Hyperdrive Portfolio Rocket Wealth Initiative Quantum Data Profits Flashpoint Trader Darknet Alpha Accelerators Brutus Alerts Resource Traders Alliance L.A.U.N.C.H. Investor Rob Roy Trader Long-Term Equity Profits

© 2023 Money Morning All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning.

Address: 1125 N Charles St. | Baltimore, MD, 21201 | USA | Phone: 888.384.8339 | Disclaimer | Sitemap | Privacy Policy | Whitelist Us | Do Not Sell or Share My Personal Information

wpDiscuz