The United States is acting as "a market without a brain" as it responds to prices and increases its oil output to record highs, Bob Dudley, the chief executive officer of the UK multinational BP Group, said Tuesday
LONDON (Pakistan Point News / Sputnik - 26th February, 2019) The United States is acting as "a market without a brain" as it responds to prices and increases its oil output to record highs, Bob Dudley, the chief executive officer of the UK multinational BP Group, said Tuesday.
On Friday, oil prices fell just below $67 per barrel after the United States hit another record in oil production by pumping 12 million barrels per day, undermining efforts of other major oil producers, including Saudi Arabia and Russia, at limiting their production to stabilize the market.
"The United States is probably the only country in the world that completely responds to market signals. It's like a market without a brain. Nobody says this is what we will do, it just responds to price signals," Dudley said at the International Petroleum Week conference in London, when asked about US beating its record in oil production yet again and complaining of high oil prices.
When asked about US President Donald Trump's recent tweet complaining of oil prices being "too high" at around $67 per barrel, Dudley argued that it could be a signal for extension of US sanctions against Iran.
"It's amazing. I don't tweet but I saw that. It struck me as the sort of a signal to extend Iran sanctions, but I have no idea about the insight of this," he said.
However, given the nature of shale oil, the high rate of US oil production may not continue for long, the BP chief said.
"The big question � longer-term for five, 10 years � is whether shale will continue going up, up, up or level up because of the nature of these fields that decline fast, it makes huge difference for the overall balance," he added.
Increased US output comes just as the Organization of the Petroleum Exporting Countries (OPEC) revised down its assessment of the oil demand growth in 2019. According to OPEC's February report, oil demand growth is expected to reach about 1.24 million barrels per day, due to adjusted economic forecasts.
