Kenneth Rogoff, a professor of economics and the former Chief Economist of the International Monetary Fund, assumes that oil prices may well recover up to $100/b in the mid-term future. In particular, he says that he doesn’t believe in the idea supported by many financial experts regarding the supposition that oil prices are never going to come back to the levels seen in mid 2014. On top of that, he assumes that sooner or later oil prices are going to see $100 per barrel or higher.
This came as a response to the statement made by al Saud, Prince of Saudi Arabia. In particular, during his interview to USA Today, he said that any price of oil of $100 and above is artificial. With that said, he insists that oil prices are never going to come back to these levels. At the same time, he expressed doubts regarding the likelihood of major oil exporters cutting down on their oil production in the near future in order to cut the global supply and to eliminate the oversupply seen now.
At the same time, the price rejects any idea that the recent decline of oil prices has anything to do with geopolitics. To his mind, it is al about growing oversupply triggered by declining global demand amid stably high global production.
It is interesting to pay attention to al Saud’s words saying that Russian is not the only major oil exporter suffering from low oil prices. He says Saudi Arabia is suffering as well.
It is also interesting to note that Saudi Arabia’s Minister of Oil keeps on underlying that oil prices are not going to recover up to $100 in the near future. At the same time, he confirmed the country’s intension to preserve the current volume of oil production regardless of oil prices (even if they fall down to $20/b).
As for oil prices, they have dropped below $45 for the first time since April 2009. In particular, the February WTI futures declined by $1,11 (2,41%) down to $44,96/b.
