Saudi Prince says cheap oil here to stay

Saudi Arabia's billionaire Prince Alwaleed bin Talal says that he does not expect to see $100 a barrel oil again. Currently, prices are less than $50 a barrel, and the Prince says these prices will last indefinitely.

He says current prices may dampen the United States shale revolution. As a matter of fact, a couple major rig operators have plans to cancel contracts, electing to pay early cancellation fees than to keep drilling at these prices.

As for political measures, the Prince says he doesn't believe the low oil prices have anything to do with Saudi Arabia and America strategizing to hurt Russia's president Vladimir Putin. The decision by Saudi Arabia not to cut oil production, in light of falling gas prices, was simply of keeping market share. Otherwise other oil producing countries like Venezuela, Brazil, Canada, Mexico, and even Russia would have made up the difference.

Lastly, Alwaleed bin Talal said that $100 a barrel is really an artificially inflated price. He admitted if supply remains where it is, and demand increases, we may see a modest increase in oil prices, but he expects oil to remain relatively cheap for the foreseeable future.

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By Bryan Gray | | Gas Prices, Natural Gas, Petroleum | 0 comments
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