President Trump certified the Iran Deal for what he warned was “the final time” last week.
If sanctions are imposed on Iran, the price of oil will almost certainly go up. But Hedgeye Energy Policy Analyst Joe McMonigle argues that times have changed. It actually might not be a bad thing for the United States.
Thanks to fracking and other new technologies, the U.S. now produces nearly 10 million barrels of crude oil a day. That's almost equivalent to Saudi Arabia.
“Strong oil prices are really important to economic growth in places like Texas and North Dakota,” McMonigle says in the video above. “We’re now in a position where higher oil prices are actually good for the U.S. Certainly not $100, maybe, but certainly better than the low 40’s. The trajectory for U.S. production is very positive and robust.”
Hedgeye CEO Keith McCullough added this insight:
“If oil’s not going up, the stock market is not hitting all-time highs like it is right now,” McCullough says. “To get oil up, means you’re getting energy stocks up, which means you’re getting financials up, which means you’re getting interest rates up.”
Watch the video above for the full conversation.