If theoil market focused on fundamentals, instead of equities and currencies, it would be half the price of what it is now, Peter Beutel, president of energy research firm Cameron Hanover, told CNBC.
“It’s been a very strange market, strangest market I’ve seen in 30 years, a market that cannot focus on its own fundamentals for more than a day or two,” Beutel said.
The US economy, he added, has never been strong with oil at $70 or $80. Oil currently sits near $80 a barrel .
“We’ve only seen strength in the US economy when oil has been at very low levels: $10, $15, under $20,” he explained.
“The strongest economic expansion we had was in the mid 90s, and we were between $10.35, which was the low of ’98, and $20,” he added. “I understand we’re in a new world, but do we really need to have oil at eight times or seven times what it was in ’98?”
Beutel said if the price of oil were cut in half, to $35 or $40, it would be a huge boost for the economy.
“That would return about $300 billion a year to the consumer, which would be better than any tax cut either of the parties are talking about now,” he said.