By Ritesh Anan
“I believe that oil will go lower, and with Saudi Arabia sort of caught blind-siding the world, and I don’t blame them,” Icahn said. “I think perhaps they made a smart decision for themselves. I think oil is very sensitive to very small differences in supply and demand. It has that roughly 93 million barrels a day that are utilized and consumed and supplied, and when it goes over that and now it’s like a million and a half or so barrels changes, the supply is high, is higher by that amount, it wreaks havoc on the stock.
“But I don’t think that will continue,” Ichan said.
He continued, “I think, the supply by definition almost has to dry up in the next few years because of depletion…and you have depletion of about 4 percent a year. So, to catch up with that you need almost one Saudi Arabia has to be discovered almost every two or three years the way I look at it. I look at it very simplistically like that.”
Continue Going Lower?
When asked to reiterate on whether he thinks that oil prices will continue to drift lower, Icahn replied, “I think in the near-term, it will continue to go down unless there’s some outside event which could be a crisis event, something happens to curtail the supply of oil, but if that doesn’t happen, I think at least for the near-term oil prices will go lower.”
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