More from Saudi oil minister Al-Naimi:
- I think solar will be the answer in the future
- High cost producers face an inevitable reckoning
- We are in a painful downturn but the market will rebalance and demand will pick up
- More technology needed to tackle carbon emissions
He says fossil fuels will continue to play a part in the energy mix but the senior leaders in Saudi Arabia believe that oil is essentially coming to an end. That means they will want to pump it at any price.
WTI crude is now down 3.2%. They believe that freezing production until demand closes the gap is the answer but with Iran and Iraq raising production, it's not a realistic strategy to put a floor under prices in the short/medium term.
Meanwhile, shale has proven to be cheaper to get out of the ground than OPEC thought. Those costs will continue to be pushed lower as technologies and techniques develop.
More comments:
- The solution is to go back to the marginal cost and let that drive demand
Translation: We'll let the market decide on prices
