Oil’s rise to $100 in future ruled out

A senior oil expert from the Kingdom said on Sunday that it would be difficult for oil to reach a price range of $100-120 per barrel again. Brent crude is currently sold at around $55 per barrel. Mohamed Al-Mady, the Saudi representative at the Organization of the Petroleum Exporting Countries (OPEC), was speaking at a workshop held on the eve of the 2nd GCC Petroleum Media Forum to be inaugurated by Petroleum and Mineral Resources Minister Ali Al-Naimi.

The three-day forum, which is being held under the patronage of Custodian of the Two Holy Mosques King Salman, is an extension of the first forum, which was held in Kuwait in 2013, where GCC leaders decided on a joint petroleum media strategy. The Saudi Research and Marketing Group, publishers of Arab News, is one of the sponsors.

Al-Mady attributed the price drop to fundamental supply and demand factors and stressed that it was not due to non-economic policies. He highlighted that it is not in the interest of OPEC to control falling oil prices. “The prices are decided by the market and are subject to the supply and demand of the product,” he said. “We are not against anybody or against the production of US shale oil since this balances the market in the long run.” He reiterated that Saudi Arabia had no political motives in its oil policy.

Forecasting growing demand for energy, Al-Mady pointed out that the world population is expected to grow from 7 billion to 9 billion, which will again increase energy demand by one-third of the present demand.

“Such growing demand for energy supplies will also require an increased investment of $40 trillion in the energy sector,” he said. Ibrahim Al-Muhanna, adviser to the petroleum and mineral resources minister, opened the workshop, titled “GCC Petroleum Media: Issues and Challenges,” at the King Faisal Hall.

The workshop featured two working papers. The first was by Al-Mady, who discussed oil marketing and the increased demand for oil due to the increase in the world’s population.

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