by MATT DILALLO for Business Insider
Right now, the oil market is totally focused on finding a bottom for oil prices. However, according to OPEC’s Secretary-General Abdulla al-Badri, we’ve already hit bottom.
Not only that, but he sees a real possibility that oil prices could explode higher to upwards of $200 per barrel in the future. He’s far from the only one that sees a return of triple-digit oil prices.
Finding a bottom
According to the secretary-general, the oil market doesn’t need to look for oil prices to bottom as the market has already bottomed.
Instead, he offered bullish comments by saying, “Now the prices are around $45-$55, and I think maybe they [have] reached the bottom and we [will] see some rebound very soon.” Now, normally that type of remark would be just another layer of noise, but this is coming from OPEC’s secretary-general so it comes with weight behind it.
That said, he’s not saying that OPEC will come in and rescue the oil market by reversing its previous decision to hold steady on production. Instead, he sees the signs that the oil market is self-correcting as oil companies have made deep cuts to spending, which will eventually lead to lower production growth.
Further, the rig count in the US is plunging, which is usually a key to a bottom in oil prices. However, in the midst of cutting back as the industry works through the current oversupply the secretary-general is now warning that the industry is putting future oil supplies at risk by under investing today.
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