Oil prices climbed higher on Wednesday after the U.S. Energy Information Administration reported an inventory drop last week. This comes as a surprise to analysts, who were expecting a slight increase in output.
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OPEC, the Organization of Petroleum Exporting Countries, has struggled to resolve issue of the current global oil supply glut, which has strongly exceeded demand for the âblack gold.â
Appearing at the SALT Conference in Las Vegas with FOX Business Networkâs Liz Claman, legendary oil tycoon T. Boone Pickens commented on OPECâs significance in the world today and why he doesnât agree Saudi Arabia is producing as much oil as it claims.
âThe Saudis claim they can produce 11.5, 12 million barrels a dayâI donât believe that,â Pickens said. âI think about 10 million, 10.5 [million] is all they can do. So they donât have any unused capacity. What happens to OPEC? Itâs kind of a trade association. Itâs not a cartel anymore.â
Pickens also said oil production in the U.S. has declined from 9.7 million barrels a day to near 9.1 million, while about 1,300 oil rigs have shut down since November of 2014.
So where does the oil tycoon see oil prices heading in the future?
âThe price is going up. Youâll be $50, $60 by the end of the yearâcould come sooner,â he said.