Eni chief exec Claudio Descalzi says Saudi Arabia has lost control of prices

Jessica Morris
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Opec is no longer the swing producer (Source: Getty)

Eni's chief executive Claudio Descalzi has previously warned under-investment could lead oil prices to hit $200 per barrel - now he's back with another ominous forecast for the world's tumultuous oil market.

Speaking to the Financial Times, Descalzi said the Organization of the Petroleum Exporting Countries (Opec) was neither willing nor able to control oil prices.

Since the 1980s Opec, led by the world's largest oil exporter, Saudi Arabia, has acted as the world's "swing producer", steering global crude prices by increasing or decreasing its production.

But recently commentators have suggested the US shale gas industry could snatch its crown.

And while Descalzi did not call for formal co-operation between the Opec cartel and other oil producing countries, he did say there was a need for "guidance" in order to avoid sharp shocks in the future.

"For the industry we need stability, and stability means guidance," he said referring to output from the US, Russia and Opec.

"We need co-operation among all the producers to stabilise the market."

A glut in the global supply of oil alongside decreased demand from emerging economies such as China pushed oil as low as as $45 per barrel in January, down from around $106 per barrel in June.

This has piled pressure onto the margins of oil producers, which have been forced to slash investment budgets, abandon oil exploration projects and cut jobs.

The black stuff has since staged a timid recovery, and is currently trading at around $60 per barrel.

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