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TO REJECT THE KEYSTONE PIPELINE. YOU KNOW HOW MUCH OF A POLITICAL ISSUE THIS WAS. THE REPUBLICANS HAD SAID, WE WANT THE KEYSTONE PIPELINE BECAUSE OIL PRICES ARE TOO HIGH AND NOW THAT ARGUMENT GOT KICKED BACK FROM UNDER THEM. WHAT WOULD BE THE IMPACT OF NOT BUILDING THIS PIPELINE? MOHAMED: THE MACRO IMPACT WOULD BE LIMITED. THE OIL MARKETS HAVE CHANGED COMPLETELY. YOU HAVE A DEMAND SUPPLY CHANGES THAT SUGGEST EVEN LOWER PRICES, BUT THE PRODUCER HAS SHIFTED. THE MACRO IMPLICATIONS OF THIS DECISION ARE MUCH LESS THAN WHAT THEY WOULD HAVE BEEN IN THE PAST. THE COMPANY-SPECIFIC IMPLICATIONS ARE SIGNIFICANT. I THINK THE BIGGEST MESSAGE TO INVESTORS IS THAT NONCOMMERCIAL AND NON-ECONOMIC ISSUES ARE IMPORTANT, ESPECIALLY IN THIS POLITICAL ENVIRONMENT AND IT IS A REMINDER TO MARKETS THAT THEY NEED TO EXTEND BEYOND THE USUAL ECONOMIC AND COMMERCIAL ANALYSES TO INCLUDE THESE OTHER FACTORS. THEY ARE GOING TO BECOME MORE IMPORTANT. THE U.S. IS NOT IMMUNE TO THESE NONCOMMERCIAL CONSIDERATIONS. BETTY: THAT IS ABSOLUTELY TRUE. THE BIG CONSIDERATION WAS HIGHER OIL PRICES. THAT IS NOW GONE. WHERE DO YOU SEE OIL PRICES? MOHAMED: THEY ARE GOING TO REMAIN VOLATILE BECAUSE THAT IS ONE OF THE TWO UNHINGED MARKETS. IT IS GOING TO TAKE TIME FOR THE MARKET TO REESTABLISH ITS FOOTING, PARTICULARLY WHEN IT COMES TO SUPPLY RESPONSIVENESS. VOLATILE MARKETS , BUT PRICES WILL REMAIN LOW FOR QUITE A WHILE. BETTY: "BLOOMBERG BUSINESSWEEK" IS TALKING TO VARIOUS VOICES AND ASKING FOR THEIR PREDICTIONS AND SOME ARE PREDICTING OIL PRICES MAY NOT GO UP MORE THAN FIVE DOLLARS OR SEVEN DOLLARS NEXT YEAR. DOES THAT SOUND RIGHT TO YOU? MOHAMED: I WOULD ANTICIPATE THAT PENDING, ABSENT ANY MAJOR ECONOMIC DISASTER AROUND THE WORLD, WE WILL SEE OIL IN THE $50 TOO LOW $60 RANGE. PEOPLE SHOULD EXPECT A LOT OF VOLATILITY. WE ARE NOT GOING BACK TO $100 OIL ANYTIME SOON. BETTY: HOW IS THAT GOING TO IMPACT OIL-DEPENDENT COUNTRIES? IN PARTICULAR CHINA? MOHAMED: CHINA IS A BIG POSITIVE. FOR COUNTRIES LIKE CHINA, LIKE INDIA, THE FACT THAT THEY ARE BIG OIL IMPORTERS, THEY ARE HAVING A VERY FAVORABLE TERM OF TRADE, SO WAS EUROPE. FOR THE OIL EXPORTERS, YOU ARE GOING TO HAVE TWO GROUPS. ONE GROUP OF COUNTRIES IS GOING TO BE INCREDIBLY CHALLENGED AND WILL BE VERY CLOSE TO AN ACCIDENT OR A POLICY MISTAKE. THINK OF VENEZUELA AND RUSSIA. YOU HAVE ANOTHER SET OF COUNTRIES THAT HAVE BUILT UP ENORMOUS WEALTH, THAT ARE ADJUSTING GRADUALLY TO THE LOWER OIL PRICES -- THE UAE, SAUDI ARABIA, KUWAIT, THOSE COUNTRIES. THEN YOU HAVE THE MIDDLE GROUP THAT ARE GOING TO FIND IT HARDER, THE COL OMBIA'S OF THIS WORLD. KEEP AN EYE ON VENEZUELA AND RUSSIA. BETTY: THANK YOU SO MUCH FOR STAYING WITH US THROUGH ALL OF THIS. MOHAMED EL-ERIAN, THE "BLOOMBERG VIEW" COLUMNIST AND THE FORMER CEO OF PIMCO.