Saudi business magnate Prince Alwaleed bin Talal predicts that oil would never hit $100 a barrel.
In an interview with FBN anchor Maria Bartiromo, published in USA Today, bin Talal blamed oversupply and weak demand for the precipitous drop in oil prices, saying “If supply stays where it is, and demand remains weak, you better believe [the price of oil] is gonna go down more. But 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 [that] the price of oil above $100 is artificial,” Alwaleed said. “It’s not correct.”
At the time of this writing, the price of U.S. benchmark crude has fallen below $47 per barrel for the first time in nearly six years, and down more than 50% since this summer.
In the interview, Alwaleed also said the Saudi government and other oil producers were caught off guard by a steep and sudden drop in crude prices. The prince, who has openly disagreed with his government on most issues, said he sees the kingdom’s recent oil policies, as a smart.
“The decision to not reduce production was prudent, smart and shrewd,” he said. “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. So, at least you got slammed and slapped on the face from one angle, which is the reduction of the price of oil, but not the reduction of production.”