Marc Faber, aka Dr. Doom, believes the worst of the oil price dive is over with only a $10 dollar dip at most likely to come to pass.
Faber, who is editor and publisher of ‘The Gloom, Boom & Doom Report’, made the comments in response to the meeting of OPEC and non-OPEC members on April 17.
This saw oil producing nations negotiate on stemming further price drops. However, a failure to agree on a freeze led the oil price to drop 7% to around $42-per-barrel.
Ahead of the meeting Iran had said that it would not participate as it has no intention of driving back production in order to curb supply. This has amplified already fractious relations between the oil producers.
‘There is a real tension between Iran and Saudi Arabia. However, supply will have to go back up once the oil price has hit $30-per-barrel because production at this point is no longer sustainable,’ he told Citywire Selector’s sister site Citywire Deutschland.
In getting a deal struck between oil-exporting countries a big focus has been on political relationships between Iran and Saudi Arabia.
Relations have become increasingly strained around the conflict in Syria. But, Faber added, Saudi Arabia has got more to lose from a low oil price.
‘Saudi Arabia and Iran are completely different. Iran is three times as big and the people are far better educated. In Saudi Arabia, the fear is a lot higher because the economy is so dependent on oil. How do you want to diversify a desert?’
