Former US Energy Secretary Says Oil Could Reach $45

The United States should lift the ban on exporting oil and natural gas because it could bolster national security and create jobs, former Energy Secretary Bill Richardson told CNBC on Friday.

“OPEC is diminished as a cartel but not out of the picture,” he said in a “Squawk Box” interview. The U.S. should “reach out to the European Union to be the main suppliers of natural gas to Europe instead of the Russians.”

The former governor of New Mexico, who served in the Clinton administration at Energy and as ambassador to the United Nations, predicted that oil prices could drop to $45 a barrel.

“The geopolitical situation is going to be affected,” he said. “Russia is going to continue having economic problems because of their budget.” He added that Venezuela, Nigeria and Iran will also feel the squeeze in connection to lower oil prices.

U.S. crude continued to decline early Friday, hitting a session low of $58.50—the lowest price since July 2009—as the International Energy Agency cut its forecasts for global oil demand growth in 2015.

On Thursday, oil dropped below $60 a barrel in New York trading—a move that took a lot of the steam out of Thursday’s powerful rally on Wall Street and sent global stock markets sharply lower Friday.

“We’re hurting a little bit right now with the lower oil prices—states like mine, New Mexico, that depend on that budget,” said Richardson. “A lot of small drilling companies are starting to hurt. A lot extraction is diminishing.”

But the U.S. is on the road to energy independence and it’s not because of the government, he added. “It’s the private sector. It’s schools becoming more energy efficient. It’s businesses.”

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza