In an interview with Bloomberg earlier this week, former Federal Reserve Chairman Alan Greenspan commented on oil prices and the functionality of the OPEC cartel.
Partial transcript as follows:
GREENSPAN: OPEC is no longer the modular producer, and as far as I’m concerned, OPEC is not functioning. I’m not at all convinced that short of a major change in the Saudis’ view of the future that that is going to fundamentally change…
The problem that we have is there are certain types of things we can’t do with so little information that we have now, on this very new structure of the market, to pinpoint where Brent is going to settle six months from now, a year from now, is actually a coin toss. We have not yet seen the structure of the market as stabilized…
We’re obviously seeing a significant cutback in investment now, significant cutbacks in drilling. Until we basically get a catch of where all this is maneuvering, I don’t think we know where the equilibrium price of oil is.
(h/t RCP Video)
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