Being asked to visit with media around the world is fun, and this time was no exception. Joyce Kaufman of “The Joyce Kaufman Show” had some great questions about the energy crisis and where we go from here. (This transcript was mildly edited for conversation flow only).
Joyce Kaufman, 850 WFTL Host; I have Jay on the line. Jay Young is the founder and president of King Operating Corporation. And, of course, he knows how the markets are reacting to all the policies of this insane administration. How are you, Jay?
Jay R. Young, CEO, King Operating; I’m good. That’s good. How are you doing?
Joyce Kaufman, 850 WFTL Host; I’m a little tired of watching my president and his administration, you know, groveling to every enemy of America, looking to get, some oil. And, of course, right now, I’m concerned about what’s going on with OPEC and how this is going to affect us.
Jay R. Young, CEO, King Operating; Good thoughts. And I know that in the last hour that we’ve had a hit down in oil prices. So, you never know what’s going to happen.
Well, we have strong demand in the United States. We’ll continue to have strong demand in the United States. When China comes up and all of a sudden says, okay, we’re going to open up China. That’s going to mean, demand will go through the roof. That’s going to affect us because, you know, in the United States, we’re not drilling as much oil as everybody might think.
We’re not energy-independent. We don’t have enough oil in the United States because we’re not producing. You know, as George Bush mentioned years ago, he said, we need 20 million barrels of oil a day. And we’re only producing at the time was like eight or 9 million before Trump. And so that means that we need oil from other people. So, Trump did come in with a half million barrels a day to 12 and a half. We’re the largest producer of oil in the world.
Even ahead of Saudi Arabia, Russia, Iraq, and Iran. You know, even Texas, where I’m from, we were ahead of a lot of countries. But the different story, different time. I’ve been around a long time, fortunately, or unfortunately. But what I have seen in the past is, you know, when we make all this money in oil What we’re seeing right now oil and gas companies aren’t coming back to the trough. They’re not coming back in and saying, oh, well, we’re making billions of dollars. We can continue to drill for oil and gas.
They’re not as they were before. That’s what’s going to hurt us because our demand is going to stay strong. Our supply is not there. So when musical chairs happen and the music stops and the strategic reserves aren’t here because they shouldn’t be. Because we shouldn’t use that for politics.
But a different story for OPEC+ is we’re not going to give you more oil. You guys have an uphill battle drill yourself. I’m sure that’s what Saudi Arabia has been telling Biden. We don’t need to give you all you got. 20. We’re not producing oil in the United States. We’re not drilling for oil in the United States as we should be. We should be drilling, drilling, drilling in the United States. We’re not. That’s what’s going to hurt us in the future, right, is when we need oil, we don’t have it.
Joyce Kaufman, 850 WFTL Host; And didn’t the meeting yesterday of the OPEC and non-OPEC producers, you had all of them, 23 oil-producing nations? We’re reducing oil production by about 2 million barrels per day. That’s about 2% of the world demand from November until the end of 2023.
What happens to the people who need oil in America? Never mind. As you said, when China reopens, all of the oil will be required for them. You know, now you’ve got a dozen countries or more saying they’re not going to buy Russian oil. We will be in big trouble. I mean, oil prices are, what, at $90 a barrel now?
Jay R. Young, CEO, King Operating; $80 a barrel.
Joyce Kaufman, 850 WFTL Host; $80.
Jay R. Young, CEO, King Operating; Could easily be at $90 soon, or even #70. Right now. And I think it’s because of some of the things that are happening after the weekend and OPEC’s is why should we sell you more oil for less money? You know, that’s what Biden was asking.
Well, they don’t want to do that they want to make money. Look, every country wants to make money we just have so many different things that are so sensitive to the price of oil. And when you don’t have the strategic reserves, when you don’t have OPEC oil and you need it, it’s going to go up.
I wrote in my book, The Upside of Oil and Gas Investing that there was not a better time than ever to continue to look at oil and gas investing for everybody. The government gives us tax breaks to go drill for oil and gas. We need oil in the United States.
So that is a challenge. It’s a really big challenge that we have, is we’re not drilling for oil in the United States we should.
Biden is very not supportive of oil. He’s been against fossil fuels since, he took office, was cutting down pipelines and permits and things of that nature., And there’s a lot of institutions, institutional investors right now that are out. So they’re saying, no, no, no, no, no, we’re not going to go back into we gave you trillions of dollars before Trump.
The public companies aren’t coming back like they were before. They’re not increasing the rig count. They should just double their rig count right now because they’re making so much money. If Exxon would increase and double its rig count, that would put more supply of oil on the market.
And what that would do is that would, you know, increase our supply. Our demands are going to be there, but it’ll oversupply the demand, which means prices will come down. Until we see those numbers from the oil supply increase, gasoline prices at the pump are going to remain high. And it’s just like I said, it’s a good time to invest in old gas, but it’s a bad time to be a consumer.
The Bottom Line
I would like to thank Joyce for having me on her podcast. It was a lot of fun and any time I can talk about lowering the energy prices to consumers it’s a great day.
As a country, we need to drill more for oil and gas. Without increasing the supply of both, energy prices to consumers will continue to rise.
