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OpCo's Gheit on OPEC: Lower Oil Prices Are Here To Stay (Audio) · Bloomberg Intelligence

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  Speaker 1: dot Com. This is taking stock. I'm Cafene Hayes along
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  Speaker 1: with pim Fox Oil. The price is down today after
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  Speaker 1: a run said it's unwilling to freeze output at current levels.
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  Speaker 1: It wants to raise production to four million barrels a day.
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  Speaker 1: This is once again dashing hopes for OPEC to reach
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  Speaker 1: a deal to stabilize markets. When the group meets tomorrow,
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  Speaker 1: pim and we have one of Wall Street's top oil
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  Speaker 1: recapping the dal the SMP Neztack continuing to advance the
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  Speaker 1: Kathleen Hays and Pim Fox on Bloomberg Radio Oil and
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  Speaker 1: oil prices. Who better to ask and understand the market
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  Speaker 1: and the participants but fadel Gate. He is a senior
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  Speaker 1: analyst at Oppenheimer and Company, and he joins us now
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  Speaker 1: partow If you were in the room in Algeria where
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  Speaker 1: they were negotiating or not negotiating among the OPAQUE members.
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  Speaker 1: What do you think we would hear, I will hear silence.
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  Speaker 1: There's nothing to talk about. It's they're trying to put
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  Speaker 1: a positive front on a situation that is not really
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  Speaker 1: entirely up to OPEC open is in price war. Uh,
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  Speaker 1: they are not seeing it. The Saludians are not seeing
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  Speaker 1: what their Indians are doing, what the Algerians are doing,
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  Speaker 1: what the Nigerians are doing, what the Venezuelans are doing.
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  Speaker 1: Saudi Arabia started the price war two years ago and
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  Speaker 1: unfortunately it backfired because you know, the other producer are
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  Speaker 1: matching what the Saudists are doing. Even Venezuela, which is
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  Speaker 1: for all practical purposes, in bankrupt country, they're still having
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  Speaker 1: plans to increase production and by significant and not not
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  Speaker 1: by sifty you know, sixty thousand barrel, but they're talking
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  Speaker 1: about two hundred and fifty thousand barrel in the next
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  Speaker 1: three years. And they are really putting bits out. So Uh,
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  Speaker 1: the Nigerians are the same. You know, all these countries
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  Speaker 1: have to live with lower or prices because all prices
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  Speaker 1: will probably lower. Old prices are here to stay. We're
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  Speaker 1: not going to see a hundred dollar oil any any
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  Speaker 1: talent soon. So things have changed and allth it has
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  Speaker 1: to learn how to live within means. That's what the
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  Speaker 1: industry has learned. That's what oil companies have learned. That
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  Speaker 1: you you you, you know, hope for the best plans
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  Speaker 1: for doors. Yes, you do always in life for so
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  Speaker 1: many things. It's almost on this side, but not really.
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  Speaker 1: I guess when you talk about living within their means.
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  Speaker 1: Story today, uh that the Saudis are going to cut
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  Speaker 1: government workers pay. I think this is some other ministers
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  Speaker 1: are going to get pea cuts. And I did not
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  Speaker 1: see in that particular news item how high those salaries were.
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  Speaker 1: Maybe they're very high. Cut is that much? But is
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  Speaker 1: that a sign that maybe the Saudis realize what's going on? Oh? Absolutely.
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  Speaker 1: The problem is when you have a country where you know,
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  Speaker 1: a less than five percent of the population has of
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  Speaker 1: the world, there's something wrong with this picture. We're talking
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  Speaker 1: about the income inequality. Welcome to the land of you know,
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  Speaker 1: you know, hardship. You know, nineties five percent of the
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  Speaker 1: Salagies are living hand amounts or five percent of the population. Obviously,
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  Speaker 1: these certamors and all these guys. So there has to
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  Speaker 1: be some change. These people just cannot continue with the
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  Speaker 1: same sale business model. They have to learn. The oil
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  Speaker 1: industry cut cut from spending by twenty alibano tw So
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  Speaker 1: the ol tech has to learn that all tech has
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  Speaker 1: to see what is going on in in real life.
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  Speaker 1: They just cannot hope for hundred dollar or to a tear.
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  Speaker 1: When oil prices were hundred and ten dollars, they kept
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  Speaker 1: saying the fair prices hundred and twenty. And when oil
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  Speaker 1: prices were hundred and forty dollars, they said that this
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  Speaker 1: is the fair price. Now all prices forty dollars, the
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  Speaker 1: fair prices seventy. But we're worthy. When all prices were
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  Speaker 1: hundred and ten, why didn't they bring or try to
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  Speaker 1: bring all prices lower. So it's one way street and
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  Speaker 1: if obviously leading to it at the end, and we're
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  Speaker 1: going to see it at the end here because freezing
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  Speaker 1: production is not going to solve the current oversupply problem.
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  Speaker 1: That is something that nobody is focusing on. That is
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  Speaker 1: not a solution. The only solution is for oil for
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  Speaker 1: for for for all text to cut usion by at
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  Speaker 1: least ten per fact, and that's not gonna happen because
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  Speaker 1: they don't trust each other. You know you Darenian and
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  Speaker 1: the Saudis. They have been in praxified for twin ty years.
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  Speaker 1: Unfortunately it didn't get data bilion because we had other
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  Speaker 1: wars that were more important to us find out. Just
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  Speaker 1: get your thoughts here on the implications for what you're describing.
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  Speaker 1: Less money in Saudi Arabia means less money to other
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  Speaker 1: nations in the region that they either support or help,
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  Speaker 1: or various groups that they support. Also in that context,
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  Speaker 1: like Venezuela supplying oil to Cuba won. If you could
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  Speaker 1: give us your thoughts, well, obviously they would have to
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  Speaker 1: satisfy their domestic demand first. One of the reasons that
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  Speaker 1: these countries are under tremendous pressure because basically they are
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  Speaker 1: well sirch states supported by or exports revenue. Things are fine,
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  Speaker 1: or at least appear to be fine when you have
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  Speaker 1: hundred dollar oil, but all of a sudden you have
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  Speaker 1: forty dollar You're no longer looking at hundred dollar oil.
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  Speaker 1: So they have to make the same you know cuts
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  Speaker 1: if you will, that any organization or company or government
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  Speaker 1: or individual will have to make because now they will
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  Speaker 1: have to live within the y. They are not prepared
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  Speaker 1: to do that quick final question, give me five ten seconds.
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  Speaker 1: How it is oil going to stay in this like
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  Speaker 1: bucks a barrel rangers? It going lower. It's not gonna
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  Speaker 1: go lower outside potential statif significantly other than the downside
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  Speaker 1: threes who have to remember that oil prices are up
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  Speaker 1: seventy five percent from their low percent down from their high.
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  Speaker 1: That is only in the left twelve months. Alright, finnel Gay,
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  Speaker 1: thank you so much. I'm Oppenheimer and Co. I'm Kathleen
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