Sir Michael Hintze: The U.S. is the World’s Margin Producer of Oil #SALT2017

May 17 2017 | 12:34pm ET

Sir Michael Hintze, founder, CEO and senior investment officer of CQS said that the United States is the world’s margin producer of oil.

In a panel at the 2017 SALT Conference, Sir Hintze said that shale production in the United States had displaced Saudi Arabia and Russia. Hintze argued that Saudi Arabia cannot be the marginal producer anymore. The nation is paying roughly 25% of its GDP on its military.

Meanwhile, in Russia, the global producer is spending 6% to 7% of its GDP on defense spending.

Hintze set a lower-range for crude prices at $40.00 per barrel and a high range of $55.00 per barrel. In the near term, he expects crude to settle prices near $45.00 per barrel.

Hintze’s projections came during a panel with George Sullivan of State Street Corporation, Joshua Friedman of Canyon Partners, Marc Lasry of Avenue Capital Group and Bruce Richards of Marathon Asset Management.

Richards followed up by stating that U.S. engineering companies will continue to bring fracking technologies that help reduce costs to other regions of the world with high reserves of oil and gas, including Patagonia, Argentina. 

“Cheap energy that we see around the world will last a long time,” said Richards.

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