PRINCE ALWALEED: Oil Is Never Going Back To $100

BI ^ | 1-12-2015 | Portia Crowe

[blam]

Portia Crowe
January 12, 2015

Prince Alwaleed bin Talal, the eccentric Saudi billionaire once labeled the "Arabian Warren Buffett," predicted that oil would never again reach $100 a barrel.

"The price of oil above $100 is artificial," he said. "It's not correct."

That's in an interview with Maria Bartiromo for USA Today, in which the business magnate blamed oversupply and weak demand for the recent drop in oil prices.

He also predicted hard times ahead for America's shale-oil and gas industries.

"No one knows for sure what price is the breaking point for shale," he said. "Wells have a higher production cost. And very clearly these will run out of business, or at least not be economical."

Back in November, OPEC announced its controversial decision not to cut oil production despite falling prices. This was seen as a call made by Saudi Arabia, despite objections from other OPEC nations that are losing money at current price levels. Some speculated this was Saudi Arabia going after Iran and Russia. Others speculated that it was a move to take market share from US shale producers, which have relatively high breakeven drilling costs.

(snip)

[Vigilanteman]

"The price of oil above $100 is artificial," he said. "It's not correct."

Weird thing is that this guy might possibly be right.

The reason that is stayed above $100 for so long is that the OPEC cartel worked out pretty well.

Now? Not so much.

Local governments have discovered the same thing when they begin to outsource some of their functions. People who aren't "entitled" can often perform those functions more efficiently and at lower cost.

[blam]

[Fightin Whitey]

Oil Is Never Going Back To $100.

When someone in the oil patch says 'never' or 'guaranteed'--- you should start getting ready for the opposite to happen.

[tcrlaf]

PEAK OIL!!!!

oops....

[blam]

"Local governments have discovered the same thing when they begin to outsource some of their functions. People who aren't "entitled" can often perform those functions more efficiently and at lower cost. "

(ahem) Out sourcing never fed a hungry child.

[SunkenCiv]

Saudi Prince Says We’ll ‘Never’ See $100 Oil Barrels Again

[ChildOfThe60s]

Like trusting the advice James Carville gives Republicans on winning elections.

It’s called consider the source & think for yourself. And study history.

[E. Pluribus Unum]

The oil market is cyclical. Always has been. Always will be.

[central_va]

Obviously it’s a price rigged market. A 50% fall in 2 months is a crash not a cycle.

[ViLaLuz]

” Good? Once they break the back of US oil production by making it uneconomical for us to produce oil, they will regain control over the price of oil, The Saudis and other OPEC countries are content to flood the global oil market to take out the competition. It is economics 101. This is the way monopolies destroy the competition.”

Then we can produce our own again.

[Dan Cooper]

OPEC and other oil producing countries are trying to destroy the growing US oil industry. Once they do that, oil prices will rise.

Once they bankrupt US shale oil drillers, they can buy up their assets cheap and keep them from starting up again when oil prices rise again.

[existentially_kuffer]

Wonder when a government goes after market/price manipulation?

[Cowgirl]

Alaska just made their budget with 120 dollar oil, guess things will not work out as planned.

[George from New England]

“Oil Is Never Going Back To $100”

Could be cause the dollar is gonna COLLAPSE first.

[Wyatt's Torch]

DXY 5-year chart:

[nascarnation]

Looked up their percentage of state govt revenue from oil...56%...ouch.

[woodbutcher1963]

So, we should be buying transportation stocks.
Airlines have already gone up. I would guess the UP, CSXT, NS, and other railroad stocks are up. However, I would think trucking companies may have been overlooked. Companies like Swift Transportation and other regional carriers should have huge increases in margin because demand is increasing for their service while their largest fixed cost(diesel) is decreasing. The only issue I continue to hear from the trucking companies I deal with is the difficulty in hiring drivers. Most can not pass a drug test.

[woodbutcher1963]

If you look at the long term chart for crude pricing(over 10 years) there was only a very short period where it was over $100. Most of the chart is between $30-$50.

[MaxMax]

Reduce regulations on our Oil industry and we'll have no problem with Opec and their price fixing.
At least that's the simple way of putting it.

[wtd]

Ann Barnhardt: How could trillions of dollars be laundered from the Wash DC regime to Saudi Arabia? Why, through Citigroup, of course. posted January 9, ARSH 2015.

"A clever reader with probably more knowledge of the Middle East than they would care to have put before me a very interesting question. Is the US laundering money to Saudi Arabia through Citigroup in order to “hedge” against, or compensate Saudi Arabia for the drop in oil prices?

Well, it sure as hell looks like it.

I recently tweeted the reportage on the massive derivatives position being accumulated by Citigroup (the parent Holding Company) and Citibank (the bank held by Citigroup HoldCo) – $135 TRILLION. Citi is adding roughly $10 TRILLION PER QUARTER, and the bank is now holding MORE derivatives than the parent HoldCo, which is unprecedented and shocking. Even worse, the bank – the derivatives holdings of which are now “guaranteed” by the FDIC, which is to say the US TAXPAYERS, thanks to the Cromnibus bill – is where the exposure is being added – $9 TRILLION was added to the Citibank portfolio within the third quarter of 2014 alone – the latest available data. Citi is the only big bank that is INCREASING its derivatives position, all the other big banks have modestly reduced their derivatives exposure in the same time period. But Citi is piling it on as hard and fast as it can – NINE TRILLION $ IN ONE QUARTER!!

Do you know who the largest private shareholder of Citigroup is?

Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud. Mister Saudi Arabia.

So, I’m going to indulge in a little dot connecting here. I don’t think this is terribly far-fetched.

I hypothesize that the Washington DC regime is providing Saudi Arabia with a “laundered short hedge” on oil prices through Citi. Citi “borrows” money from the Federal Reserve at next to zero percent, plows it into swaps (a form of highly leveraged derivative wherein cashflows, not assets, are the underlying “commodity”) at this stunning clip because all swaps are held “off balance sheet”. Remember that term from MF Global?

The position is such that it makes money when oil prices drop, thus “hedging” Saudi Arabia. If the poop hits the fan, thanks to the Cromnibus, 100% of Citibank’s derivatives portfolio is now under the umbrella of the FDIC, which we all know means the Federal Reserve printing dollars to bail out their friends. The FDIC is only sitting on a few billion in assets. It’s a joke.

So, the Washington DC regime has essentially posted YOU AND SEVERAL GENERATIONS OF YOUR PROGENY as the collateral guaranteeing a short hedge on oil prices that it is providing for Saudi Arabia through its ownership of Citigroup. In other words, MONEY LAUNDERING, EXCEPT ON A MULTI-GENERATIONAL, CIVILIZATIONAL SCALE.

Lee Greenwood could not be reached for comment.