UT Energy Forum Preview

 

The UT Energy Forum will be held this Thursday and Friday, February 2 and 3, at the Etter-Harbin Alumni Center.  The Forum covers a wide range of energy topics, and I will be moderating a panel discussion on oil and gas prices on Friday afternoon that includes the following distinguished panelists:

  • Jeff Bartlett, Energy Portfolio Manager, Apollo Management, L.P.
  • Roger Ihne, Principal and Energy Portfolio Leader, Deloitte
  • Jason Schenker, President and Chief Economist, Prestige Economics
  • Niloy Shah, CFO, BP’s Gulf of Mexico region

In this blog post, I'd like to outline some topics I will address on Friday, with the hope that readers will provide feedback in advance of the discussion. 

First, I’d like to examine the relationship between natural gas and oil prices.  These prices have diverged in the United States, where domestic gas prices have recently fallen below $3.00, which is much cheaper than gas prices in Europe and Asia. 

The panel will discuss factors contributing to this phenomenon, and whether the oil-gas price divergence is expected to continue. I am also interested in the panelists’ estimates of oil prices for the next 5 years, including assessment of the most influential factors on these prices. 

Second, I’d like to examine the difference between consumers’ opinions on factors influencing energy prices, as measured by our UT Energy Poll, compared to the opinions of industry experts. In particular, I would like to consider political and regulatory influences. 

With regard to global politics, events in the Middle East continue to raise concerns about potential impact on oil prices and I would like to hear the panelists’ perspectives on these events and their impact on prices. Most recently, we have read in the news about Iran possibly closing the Strait of Hormuz, Libya boosting oil production, and the European Union imposing an embargo on oil imports from Iran. In a recent press release, the IMF estimated the closure of Hormuz, through which approximately 40% of global oil exports pass, would increase oil prices by $30 per barrel or more.

With regard to domestic politics and regulation, Obama recently rejected the current Keystone proposal, delaying the process and requiring further environmental review. While this decision elated the environmental community, Obama also announced a lease sale next June covering 38 million acres in the Gulf of Mexico for offshore drilling. How are these decisions viewed by the industry and how might they impact short term and long-term oil prices? 

I am looking forward to the discussion and hope that a number of you will be joining us on Friday afternoon.

Disclaimer

The views expressed are those of the author and not necessarily The University of Texas at Austin.
 

About The Author

Sheridan Titman

Walter W. McAllister Centennial Chair in Financial Services, McCombs School of Business

Sheridan Titman is a professor of finance at The University of Texas at Austin and a research associate of the National Bureau of Economic...

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