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 “black gold.”
Appearing at the SALT Conference in Las Vegas with FOX Business Network’s Liz Claman, legendary oil tycoon T. Boone Pickens commented on OPEC’s significance in the world today and why he doesn’t agree Saudi Arabia is producing as much oil as it claims.
“The Saudis claim they can produce 11.5, 12 million barrels a day—I don’t believe that,” Pickens said. “I think about 10 million, 10.5 [million] is all they can do. So they don’t have any unused capacity. What happens to OPEC? It’s kind of a trade association. It’s not a cartel anymore.”
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?
“The price is going up. You’ll be $50, $60 by the end of the year—could come sooner,” he said.