♪ OH, PLEASE --
DAGEN:  OPEC LOSING ONE OF ITS
OLDEST MEMBERS.
QATAR ANNOUNCED THEY WILL LEAVE
THE CARTEL AFTER A 57 YEAR
MEMBERSHIP.
THIS COMES AS THE COUNTRY LOOKS
TO BOOST GAS PRODUCTION, AHEAD
OF THIS WEEK'S OPEC MEETING.
JOINING US NOW, STEVEN SHORK.
WHAT DO YOU MAKE OF THIS MOVE?
WHAT HAPPENS AT THE OPEC MEETING
LATER THIS WEEK?
>> CERTAINLY THE MOVE BY QATAR
IS ABSOLUTELY SYMBOLIC AND
SYMBOLIC ONLY, BEING THAT THIS
IS THE FIRST PERSIAN GULF
COUNTRY TO EVER LEAVE THE
CARTEL.
WE'VE HAD OTHER COUNTRIES LEAVE,
COME BACK, SUSPEND THEIR
MEMBERSHIP.
QATAR IS THE FIRST PERSIAN GULF.
WE HAVE TO KEEP IN MIND, THE
COUNTRY ONLY PRODUCES OR
PRODUCES FEWER BARREL OF CRUDE
OIL THAN THE STATE OF NEW
MEXICO.
GIVEN THE RELATIONSHIP, THE
FRAYED RELATIONSHIP WITH SAUDI
ARABIA, GIVEN THAT CERTAINLY THE
COUNTRY PRODUCES 2% OF OPEC'S
OIL PRODUCTION, THEY ARE UNDER
SAUDI'S THUMB, SO YOU LEAVE
OPEC, YOU FOCUS ON LNG, NATURAL
GAS.
THE COUNTRY PRODUCES ABOUT A
THIRD OF THE GLOBE'S PRODUCTION.
YOU GET UNDER THE THUMB OF THE
SAUDIS AND YOU FOCUS ON YOUR
FUTURE MANY THE FUTURE IS NOT
CRUDE OIL, IT IS NATURAL GAS.
DAGEN:  WHAT DO YOU MAKE OF
SAUDI ARABIA AND RUSSIA MAKING A
DEAL AHEAD OF THE OPEC MEETING,
UNCLEAR HOW MUCH RUSSIA WILL
CURB OUTPUT.
THE WALL STREET JOURNAL HAS AN
ARTICLE OUT SAYING WILL THE
CARTEL MAKE THE SAME MISTAKE
THEY DID IN 2014 WHERE THEY
DIDN'T CURB PRODUCTION ENOUGH
AND YOU HAD A 2015 SLUMP THAT
RIPPLED ACROSS NOT JUST THE
COMMODITIES MARKETS BUT THE
STOCK AND DEBT MARKETS AS WELL.
>> OF COURSE, IT WASN'T JUST IN
THE MARKET IN 2014, IN 2015I WAS
THE ENTIRE INDUSTRIAL METALS
MARKET.
IT WAS A SLOWDOWN IN DEMAND,
GROWTH.
WHEN IT COMES TO OPEC, WE WANT
TO FOCUS ON SUPPLY MANY WE
ALWAYS SEEM TO FORGET ABOUT
DEMAND AND DEMAND IS CERTAINLY
STRONGER.
THE ECONOMY IS STRONGER THAN IT
WAS THREE, FOUR YEARS AGO.
I'M NOT TOO CONCERNED ABOUT
THIS.
WE HAVE TO KEEP IN MIND, DAGEN,
I'VE BEEN SAYING THIS ON THE
SHOW FOR THE PAST FOUR, FIVE
WEEKS, THAT CRUDE OIL IS
SEARCHING AT A BOTTOM.
WE HAVE TO KEEP IN MIND THAT THE
PULLBACK OVER THE LAST TWO
MONTHS IN OIL PRICES FROM ABOUT
$75 TO $50 WAS AN IMPLOSION AND
A BUBBLE THAT WAS PROMOTED BY
WALL STREET AT THE END OF THE
SUMMER WITH REGARD TO IRANIAN
SANCTIONS.
REMEMBER THOSE?
TWO MONTHS AGO WALL STREET'S
BEST AND BRIGHTEST WERE TELLING
US OIL WAS GOING TO RALLY $25
FROM $75 TO $100 A BARREL.
THEY GOT THE $25 RIGHT.
UNFORTUNATELY, THEY GOT THE
DIRECTION WRONG.
WE CAME OFF $25, DEMAND IS MUCH
STRONGER NOW.
WE'RE COMING OUT OF SEASONAL
MAINTENANCE.
DEMAND BY REFINERIES PICKS UP.
DEMANDS BY MOTORISTS PICKS UP.
IF OIL IS GOING TO FIND A BOTTOM
AND MOVE HIGHER, THIS IS THE
STARTING POINT.
DAGEN:  WHAT IS A REASONABLE
PRICE AND ACCURATE PRICE?
CAN YOU THROW OUT A NUMBER?
>> ABSOLUTELY.
WHEN WE'RE LOOKING AT-WHERE
WE'RE AT AS FAR AS REFINERY
ECONOMICS, PRODUCTION ECONOMICS,
WE'RE AT THE BOTTOM, $5 BELOW,
$55 IS MORE OF YOUR COMFORT
RANGE.
YOU DON'T WANT TO SEE OIL PRICES
BELOW WHERE WE ARE YOU NOW, $50
A BARREL.
A NUMBER THAT WOULD BE GOOD FOR
THE ENTIRE INDUSTRY, $65 AVERAGE
FOR THE YEAR.
DAGEN:  STEVEN SHORK, ALWAYS A
