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00:00THE PRODUCT COMPLEX AROUND THE WORLD. PAUL: IN TERMS OF SUPPLY, HOW CLOSELY ARE YOU WATCHING THOSE OUTBURSTS OF CIVIL UNREST IN LIBYA AND VENEZUELA, HOW MUCH HIGHER DO THOSE FACTORS HAVE TO DRIVE THE OIL PRICE? > > THOSE ARE HUGE WILD CARDS, EVERYBODY IS TALKING ABOUT IRAN AND WHAT IS SAUDI GOING TO DO, PEOPLE ARE TALKING ABOUT WHETHER THERE WILL BE SECONDARY FROM VENEZUELA, THE REAL WILD CARD IS WHAT IS GOING ON IN LIBYA WITH THE CIVIL WAR THERE. WE HAVE SEEN MASSIVE SWINGS IN LIBYAN PRODUCTION GOING FROM A LOW OF 300,000 BARRELS A DAY TO $1.1 MILLION BARRELS A DAY IN A SHORT PERIOD OF TIME. IF THE U.S. ADMINISTRATION IS GOING TO TIGHTEN THE SCREWS ON BOTH VENEZUELA AND IRAN, THEN THAT REALLY IS CONTINGENT UPON HAVING MORE STABILITY IN LIBYA. WE SEE THAT WITH CHANGE IN TACTIC IN TERMS OF WHO THE U.S. IS SUPPORTING IN LIBYA RIGHT NOW. THAT'S REALLY A MASSIVE WILD CARD THAT CAN REALLY STOKE PRICES MUCH HIGHER GOING FORWARD. SHERY: WHAT ABOUT THE RISK OF IRAN THREATENING TO SHUT THE STRAITS OF HORUSE? > > IT WOULD BE A MASSIVE ACT OF WAR, IF IT DID HAPPEN, PRICES COULD SPIKE EXPONENTIALLY. THE REAL RISK OF SANCTIONS FROM IRAN FOR THE UPSIDE COMES FROM THE POLITICAL TENSIONS. IRAN IS VERY IRATE. MORE HARD-LINERS IN LEADERSHIP RIGHT NOW. IT'S NOT SO MUCH THEY THREATEN TO CLOSE THE STRAITS, BUT WHAT DO THEY DO IN OTHER PARTS OF THE REGION THAT RATCHETS UP TENSIONS AND ADDS A GEOPOLITICAL BID TO OIL. SHERY: HOW MUCH DOES IT DEPEND ON THE U.S. CHINA TRADE DEAL WHEN IT COMES TO CHINA'S BEHAVIOR? > > THAT'S A BIG PART OF IT. THAT WILL TERM HOW COMPLIANT CHINA IS WITH THESE SANCTIONS. AS OF NOW, WE DON'T THINK THEY WILL BE THAT COMPLIANT. IF THERE IS A TRADE DEAL, THAT COULD ALTER THE EQUATION AND BE SUPPORTIVE FOR PRICES BECAUSE IT COULD BE SUPPORTIVE OF DEMAND. WE'RE DEALING WITH A LACKLUSTER DEMAND OUTLOOK. IF WE GET A TRADE DEAL, THAT WOULD BOOST CONFIDENCE AND HELP THE DEMAND OUTLOOK. PAUL: IF WE LOOK AHEAD TO THE END OF 2019, WHERE DO YOU SEE CRUDE PRICES BY THEN? IT'S DIFFICULT TO CALCULATE GIVEN ALL OF THE WILD CARDS. > > PRICES CONTINUE TO STRENGTHEN INTO THE SUMMER, A STRONG PERIOD OF TIME, SEASONALLY IT'S THE HIGHEST DEMAND PERIOD, ESPECIALLY IN THE BACKDROP OF EVERYONE RUSHING TO BE NEAR TERM COMPLIANT WITH THE IRAN SANCTIONS. I THINK PRICES GO HIGHER FROM HERE BEFORE THEY ULTIMATELY PETER OUT AND COULD END THE YEAR AROUND 55 TO 60 FOR W.T.I. THERE IS CERTAINLY RISK TO THE UPSIDE, ESPECIALLY IF ANY OF THESE GEOPOLITICAL TENSIONS

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Oil Seen Around $55-$60 at Year End With Risk to The Upside: Nasdaq's Essner

Tamar Essner, director for energy and utilities at Nasdaq, talks about oil supply, prices and the geopolitical tensions. She speaks on "Bloomberg Daybreak: Australia." (Source: Bloomberg)

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