Salient to Investors:

Benjamin Salisbury at FBR Capital Markets said advances such as fracking are leading to record production that may outstrip refinery capacity within 18 months to 3 years. Salisbury said you have to see the rig count fall and then and only then can we have a decision about whether the US wants to export crude.

Robin West at PFC Energy said exports must expand to sustain the boom that increased US production last year by the most since the first commercial well was drilled in 1859, or in two years we effectively hit the wall that will start affecting price, and then production.

The Energy Department said net petroleum imports now account for 40 percent of demand, down from 60 percent in 2005, while the US is on pace to surpass Saudi Arabia as the world’s largest producer by 2020.

Light, sweet crude is less costly to process than high-sulfur grades pumped by Saudi Arabia and Venezuela, making it more profitable for export. Landlocked by the export ban and limits on transportation, US light trades at a discount to the European blend that sets prices for more than half the globe’s oil.

David Goldwyn at Goldwyn Global Strategies said Americans may balk at exporting oil because of concerns it would lead to higher gasoline prices.

Adam Sieminski at the Energy Information Administration said the ability to export excess production has actually allowed refineries to operate at higher utilization rates, resulting in lower prices for consumers than they would otherwise be.

Philip Verleger at PK Verleger said it is very simply a game of market power, because US prices for petroleum products won’t be any different whether we export crude or not, while limits on exports will allow refiners to squeeze producers, boosting refining margins.

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