The WSJ today reports that exporting of U.S. oil has been made available to two producers in the Eagle Ford. I'm curious as to how (or if) this might affect oil prices (aka my revenue checks as a royalty owner!) in the near to medium term. What's your opinion?
I believe it will sustain if not increase oil prices. I don't know that it will necessarily drive additional drilling (as opposed to what is already planned / or in the process of drilling). I had an economics professor in college who made a point once, that our goal is not to utilize or capture all of our resources - before we exploit that of others. Ultimately, we want to be left with enough of our own resources in the future so that when everyone else is tapped out, we still have recoverable assets in the ground. That does not mean use other countries resources first, but to balance the use of domestic and foreign resources in a way that leaves us with enough resources for our own consumption when all other sources are exhausted.
If anything it might provide some stability to oil prices. Exporting our crude would give other nations options they would otherwise not have.