1

1

E-mail Article

Printer Friendly

Share Article

Oil price super-spike 'inevitable' - investment chief

The director of Istithmar World Capital has said a super-spike in oil markets in inevitable if prices remain at current levels.

“I really hope that the price of oil goes up to $60 or $80…This is a price that everyone can pay and will keep a sustainable level of investment in the oil industry,” Pablo Fetter said on the sidelines of a conference.
“If we keep on with this low price of oil for some time, there will be no investment in the oil industry, and that would mean the return of oil overshooting.”

Fetter said that although demand for oil has come down, there has also been a significant reduction in capacity. The Canadian oil sands hold larger oil reserves than Saudi Arabia but production is unprofitable at current price levels.

In a report issued on Tuesday, US investment bank Morgan Stanley said the price of oil will average $35 per barrel this year.

“If you take a look at history, there has been barely a year when the demand for oil went down on a year by year basis on an annual basis,” Fetter said.

Istithmar World Capital is a private equity and alternative investment house focused on the aviation and aerospace industry, including airlines, manufacturing, engineering and financing.

It is part of Istithmar World, an investment arm of Dubai World.

Comments 1-1 of 1