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7 May, 2020 14:29

Egyptian billionaire: Buffett is wrong, oil will hit $100 within 18 months

Egyptian billionaire: Buffett is wrong, oil will hit $100 within 18 months

Oil could hit $100 per barrel within the next 18 months, Egyptian billionaire Naguib Sawiris told CNBC on Wednesday—a hard pill to swallow with Brent currently trading below $30 per barrel.

Sawiris, chairman of one of Egypt’s largest companies, Orascom Telecom Media and Technology Holding S.A.E., is Egypt’s second-richest man and has a net worth somewhere between $3 billion and $7.5 billion. It’s hard to pin down because net worth is a (downward) moving target these days.

Sawiris told CNBC that he would buy airline stocks. At the same time, Warren Buffett’s Berkshire Hathaway dumped all of its airline holdings after losing nearly $50 billion in Q1. The selloff hit the airlines hard.

Sawiris not only talked up investing in oil, which he said could reach $100 per barrel but spoke out to CNBC against Saudi Arabia and Russia, who Sawiris alleges were trying to kill off the US shale industry. Sawiris also told the network that he supported US President Donald Trump’s plan to reopen the American economy.

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“They might not find the cure, they might not find the vaccine, so how long are we going to be in prison in our homes?” Sawiris asked.

It is precisely this reopening that is the oil industry’s most promising—or rather, the only—path forward, as current demand destruction is too much for the heavily indebted US shale industry to bear forever—particularly when combined with overproduction from OPEC and its allies up until now.

Sawiris has been a champion of the reopen movement, stating as far back as a month ago that he would commit suicide if the lockdown measures were not rescinded within two weeks.

READ MORE: The death of US oil

Air traffic is down 90 percent, with airlines currently losing $10 billion monthly, according to Barron’s, who reported on Wednesday that Citi analyst Stephen Trent shares also thinks that this might be a good time to buy into at least one airline: United.

Air traffic is a significant component of the transportation industry’s demand for crude oil and crude oil products.

This article was originally published on Oilprice.com