News

U.S. on verge of lifting 40-year oil export ban

According to Reuters, the United States appears on the brink of ending a four-decade ban on most exports of crude oil, which would end a years-long fight brought about by a boom in domestic shale output that contributed to a supply glut and depressed prices. The measure is part of a sprawling deal wrapped up by congressional leaders late on Tuesday to keep the U.S. government open through September. The $1.15 trillion spending bill, negotiated in secret talks over the last two weeks, would be difficult for President Barack Obama to veto despite his opposition to ending the oil export ban. In a partial victory to Obama and other Democrats, the spending bill also includes granting tax incentives to boost wind and solar development, according to lawmakers involved in the talks. Shares of solar companies rose sharply. Republican and Democratic lawmakers will meet separately on Wednesday to discuss the bill and hope to vote on it as soon as Friday. Allowing oil exports would be a win for the U.S. oil industry and Republicans, who had argued the ban was a relic of the 1970s Arab oil embargo. Exploration and production companies, many saddled with billions in debt and struggling to avoid bankruptcy after a 60 percent slide in oil prices forced them to halt most new drilling, had viewed exports as a lifeline of sorts. But with U.S. output now falling as oil prices slump to seven-year lows, traders say foreign buyers may not materialize in a glutted global market. The S&P Energy Index .SPNY was down over 1 percent in early afternoon trading on Wednesday. Some Democrats in the Senate say lifting the ban would put oil refining jobs at risk and that more drilling would harm the environment, though Democratic Sen. Heidi Heitkamp, from the No. 2 oil state North Dakota, has supported its repeal. The drop in oil prices, now below $40 a barrel, has helped ease worries about higher gasoline prices for consumers. Producers say eliminating the ban would help revive a U.S. drilling boom by closing the years-long gap between cheaper domestic crude prices and higher global rates. The move would also give U.S. allies alternatives to Russia and the Organization of Petroleum Exporting Countries for their supplies. « Lifting the oil export ban is very important to our industry to enable them to compete on a global basis, » said Senator John Hoeven. The Republican from oil-producing North Dakota has pressured Congress to axe the trade restriction. Chief executive officers of U.S. oil producers, from integrated global majors Exxon Mobil Corp (XOM.N) to frackers like Continental Resources Inc (CLR.N), had urged the ban be lifted. Gregory Hill, president of U.S. oil independent Hess Corp (HES.N), said this month that ending the prohibition would boost domestic crude prices by about $3 a barrel, or about 8 percent, from around $36. Refiners have been divided on the issue, as exports of crude would increase their costs after a bounty of cheap domestic oil brought several years of surging profits. Four U.S. independent refiners, three of which operate on the East Coast, have opposed exporting domestic crude. Their so-called CRUDE Coalition says lifting the ban will lead to higher pump prices when once-landlocked domestic crude commands higher prices in global markets. PBF Energy Inc (PBF.N), Philadelphia Energy Solutions LLC, Alon USA Energy Inc (ALJ.N) and Delta Air Lines (DAL.N) unit Monroe Energy also say the ban protects national security and supports economic growth by keeping energy prices low for manufacturers. Other refiners, including Valero Energy Corp (VLO.N), Marathon Petroleum Corp (MPC.N) and Phillips 66 (PSX.N), have expressed support for free markets or said they would not oppose the ban



%d blogueurs aiment cette page :