Fox Business posted a story today by Maria Bartiromo. The story included an amazing statement by Saudi billionaire businessman Prince Alwaleed bin Talal. The Prince stated that we will never see $100 a barrel oil again.
The article includes the following quote:
Saudi Arabia and all of the countries were caught off guard. No one anticipated it was going to happen. Anyone who says they anticipated this 50% drop (in price) is not saying the truth.
Because the minister of oil in Saudi Arabia just in July publicly said $100 is a good price for consumers and producers. And less than six months later, the price of oil collapses 50%.
Having said that, the decision to not reduce production was prudent, smart and shrewd. 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.
This is an interesting situation–the Saudis kept the production up so the price would go down. This seriously impacted the economies of Iran, Russia and Venezuela, and indirectly Cuba. It also made oil production in America less attractive–smaller profits. If the Saudis cut production to raise the price, American production comes back up and reduces the price. If the Saudis keep the price low, American production will be less, but will still exist.
I love the idea that we will never again see $100 a barrel oil. I am tired of being blackmailed by the Middle East oil producers. Maybe now we can stop funding terrorism.