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Rich Pedroncelli / AP

I chatted yesterday with Bob McNally, whose well-received January 2017 book Crude Volatility traced the history of oil markets and analyzed (among other things) the withering of OPEC's limited power.

He shared his views on the recent attempts by the Saudi-led cartel and other producers including Russia to regain market influence; Trump's policy moves; what's next for prices, and more.

OPEC: "They have been more successful at managing sentiment and influencing traders for short periods of time than they have been at their traditional role of a swing producer, which is managing supply," said McNally, president of the Rapidan Group.

Crystal ball, part 1: despite the recent blip upwards after falling to their lowest levels of the year last week, the bearish McNally sees prices heading much lower in the not-too-distant future, getting into the low-$30s per barrel by the first half of next year, if not sooner. The recently extended production-limiting deal between OPEC, Russia and others isn't close to enough to tame the bears.

  • "Since 2014 I have been the biggest bear I know, and where I have made mistakes is I haven't been bearish enough," McNally said in Washington, D.C. after speaking at the Energy Information Administration conference.

Crystal ball, part 2: McNally also sees a big, big uptick in prices coming after "one more bust phase." McNally agrees with analysts who say lower industry capital spending in recent years on new projects worldwide will hinder supply in a few years.

But there's more to it: McNally says the global thirst for oil is going to be higher than many believe.

  • "Everyone will be looking at the supply side. What we are going to miss is how thirsty demand is."
  • He believes that five years from now, oil prices will be well north of $100 per barrel.

Trump and policy: The most significant policy change for the industry is not removal of regulations but rather the administration's favorable view of oil-and-gas infrastructure construction, signified by approval of the Keystone and Dakota Access pipelines.

It's a reversal of what he calls a trend to more restrictive policy toward oil infrastructure permitting by Democrats that had emerged and was a threat to continue.

  • "It's the bullet that missed them," he said. "That could have really caused problems for industry."

McNally also discussed how the Trump administration might respond if prices crater below the low-$30s that he's forecasting, and believes retaliatory trade measures could emerge.

  • "If that [price collapse] were to happen, it would cause spasms of pain in the U.S. oil patch, and one big difference between Republican administrations and Democratic ones in general, particularly this one, is that the White House and Republican Congress is going to feel the pain of the producers, and they would, I think, interpret a collapse in oil prices through sort of a trade lens, as a direct attack by OPEC on our oil sector, and putting at risk the 'energy dominance' that is being talked about this week," he said.

Go deeper

CDC to cut guidance on quarantine period for coronavirus exposure

A health care worker oversees cars as people arrive to get tested for coronavirus at a testing site in Arlington, Virginia, on Tuesday. Photo: Olivier Douliery/AFP via Getty Images

The CDC will soon shorten its guidance for quarantine periods following exposure to COVID-19, AP reported Tuesday and Axios can confirm.

Why it matters: Quarantine helps prevent the spread of the coronavirus, which can occur before a person knows they're sick or if they're infected without feeling any symptoms. The current recommended period to stay home if exposed to the virus is 14 days. The CDC plans to amend this to 10 days or seven with a negative test, an official told Axios.

  • The CDC did not immediately respond to a request for comment.
1 hour ago - Health

CDC panel: COVID vaccines should go to health workers, long-term care residents first

Hospital staff work in the COVID-19 intensive care unit in Houston. Photo: Go Nakamura via Getty

Health-care workers and nursing home residents should be at the front of the line to get coronavirus vaccines in the United States once they’re cleared and available for public use, an independent CDC panel recommended in a 13-1 emergency vote on Tuesday, per CNBC.

Why it matters: Recent developments in COVID-19 vaccines have accelerated the timeline for distribution as vaccines developed by Pfizer and Moderna undergo the federal approval process. States are preparing to begin distributing as soon as two weeks from now.

Obama: Broad slogans like "defund the police" lose people

Snapchat.

Former President Barack Obama told Peter Hamby on the Snapchat original political show "Good Luck America" that "snappy" slogans such as "defund the police" can alienate people, making the statements less effective than intended.

What he's saying: "You lost a big audience the minute you say it, which makes it a lot less likely that you're actually going to get the changes you want done," Obama told Hamby in an interview that will air Wednesday morning at 6 a.m. EST on Snapchat.