Prince Alwaleed backs Saudi’s refusal to cut crude, says $100 per barrel never again

Saudi Arabian billionaire and business magnate Prince Alwaleed bin Talal recently made comments on the future oil crude oil prices by stating, “We will not see $100-a-barrel oil again.” The plummet of oil is the talk of the energy world, and while cheap prices are great for consumers and indirect industries that consume fuel, the intense lows are cutting deep into the budgets of major oil producers like Saudi Arabia and Russia. The major investor recently had an exclusive interview with Maria Bartiromo of USA Today about the current lows of petroleum and how Saudi Arabia will move forward in the current market. Talal stated that “Saudi Arabia and all of the countries were caught off guard” in regards to the 50 percent drop in oil prices the world has witnessed over the past year. Internationally, Saudi Arabia, a leader among the Organization of Petroleum Exporting Countries (OPEC), has dominated headlines ever since November when it announced not to cut production even when the world market was becoming gluttonous with crude oil. However, the prince offered some clarity to the reasoning of Saudi Arabia’s unwillingness to cut production. “The decision to not reduce production was prudent, smart and shrewd,” said Talal. Known to disagree with many policies of Saudi Arabia, Talal exclaimed that the refusal to give up market share was the right move on the part of government officials. “Because had Saudi Arabia cut its production by 1 or 2 million barrels, that 1 or 2 million would have been produced by others. Which means Saudi Arabia would have had two negatives, less oil produced, and lower prices.” In his predictions about future oil prices, Prince Alwaleed bin Talal noted that “If supply stays where it is, and demand remains weak, you better believe it is gonna go down more.” Nonetheless, he left room in his comments for an uncertain forecast about the supply which makes it to market, adding “if some supply is taken off the market, and there’s some growth in demand, prices may go up. But I’m sure we’re never going to see $100 anymore. I said a year ago, the price of oil above $100 is artificial. It’s not correct.” Talal also agreed with many predictions that the current low prices of energy will attribute to numerous mergers and acquisitions. He stated that although bigger companies like Exxon and Chevron could weather the present market reality, there’s no doubt that many mergers and acquisitions are coming in the next one to two years. You can check out the extensive interview with Prince Alwaleed bin Talal and USA Today here.

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Walter Skinner

Walter Skinner joined the Pluto Daily in 2012 and has covered news from around the world.