Oil is unlikely to rebound to $100 a barrel because increasing prices would prompt shale oil producers to expand an output, Mohammed al-Madi, Saudi Arabia’s OPEC Governor, said at a conference in Riyadh.
“It will be difficult to reach $100 or $120 another time,” al-Madi stated. “This will let the high-cost producers come back again.”
So, growing energy prices are expected to trigger oil surge from the countries with a high oil production cost.
Saudi Arabia is planning to invest in its oil sector aiming to maintain the current levels of the oil output.
“Shale oil companies are ones of the high-cost producers that benefited from high oil prices,” al-Madi made a comment. “We’re not against shale oil. We welcomed shale oil, but it’s not fair for high-cost producers to push low-cost producers out of the market,” the top official noted.
“If OPEC could have controlled the prices it would have done so, but it is not in the interest of OPEC to control the prices,” al-Madi said. “It is OPEC’s interest to achieve balance in the market. The price should be decided by the market, and the market is subject to supply and demand,” he added.
The world will need $40 trillion of oil investments in the next two decades to meet growing demand led by emerging markets.
