Oil prices won't rebound to $100 a barrel because increased prices would draw more shale and other output from higher-cost producers to the market, according to Saudi Arabia's governor to OPEC.
"I think it will be difficult to reach $100 or $120 another time," Mohammed al-Madi said at a conference in Riyadh yesterday. "This will let the high-cost producers come back again."
Saudi Arabia, the nation leading OPEC in defending its share of the global oil market, will keep investing to maintain its current output capacity, he said.
The price of Brent oil declined almost 50pc in the past year as Saudi Arabia and others in OPEC committed to maintain output amid a global surplus.
US output is the highest in three decades as drillers pump crude from shale. "Shale oil companies are one of the high-cost producers that benefited from high oil prices," Mr al-Madi said. "We're not against shale oil. We welcomed shale oil but it's not fair for high-cost producers to push low-cost producers out of the market."
The world needs $40trn (€37trn) of oil investments in the next two decades to meet growing demand led by emerging nations, Mr al-Madi predicted.
Demand will grow by one million barrels a day every year for the next 15 years to about 111m barrels a day, said Nasser Al-Dossary, Saudi Arabia's OPEC national representative, said at the same conference.