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What Does The End Of The Oil Export Ban Mean For Investors?

December 31, 2015 8:43 am
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What Does The End Of The Oil Export Ban Mean For Investors?

This year, Congress historically decided to lift a ban on US oil exports as part of a budget deal. Producers have been pushing for lawmakers to lift the ban for years and now, after 40 years, they will finally get their wish.

With US crude oil finally able to be shipped and sold abroad, many investors are wondering what impact the move will have on the wider market and who stands to benefit from the ban's removal.

Unlikely To Impact Prices

At the moment, oil prices are stuck in a rut as economic worries have kept demand from meeting supply. Producers around the world have been reluctant to cut back, and the result has been a massive supply glut that has suppressed oil prices.

US exports are unlikely to do much to change that, meaning that Congress' decision to lift the ban on exporting US crude won't do much to improve the market conditions.

Who Will Benefit?

Oil exploration and production companies that are willing to ship overseas will be the largest beneficiaries of the ban's removal. ConocoPhillips (NYSE: COP) and NuStar Energy LP (NYSE: NS) are slated to complete the loading of the first tanker of freely traded US crude oil on December 31.

The two are not the only ones planning to ramp up exports now that the ban has been lifted, though. Other companies like Enterprise Products Partners LP (NYSE: EPD) are also planning to sell abroad.

However, none of these firms are likely to see a major jump in revenues now that the ban has been removed as demand across the globe remains suppressed.

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