The oil price is making a fool of everyone.
That's according to Steve Schwarzman, cofounder of private-equity giant Blackstone.
The billionaire investor was speaking at the Bernstein Thirty-Second Annual Strategic Decisions Conference 2016 on Thursday, and talked about the volatile oil price.
Let's just take energy first because it's in the news a lot. And talk about a crazy business where there's almost not one person who knows what they're doing, right? At $120, it was going to $140 a barrel. When you were at $80, it was going to stabilize at $60. And when you're in $60, you didn't quite know, but maybe it would be $50 to $70. And then when it went to $24, everybody is a bozo, right? And then it was going to stay there, sort of $25 to $35 or maybe $40 for the next year or two, and now it's $50.
We've seen crazy swings in oil prices this year, largely driven by slowing demand, increased supply, and speculation over a potential coordinated cut in the production of oil. US oil prices ended slightly lower on Thursday after briefly rising above $50 a barrel in intraday trading.
Schwarzman said that his favorite person to talk to when trying to make sense of the oil market was Exxon CEO Rex Tillerson. He said:
When the price's around $60, I asked Rex, "What do you think?" He said, "Well, it's going to be between $20 to $120, and we're set up for all of those environments. I think it'll go a little lower than higher, but what do I know? I've just been doing this my whole life." And I thought, he's kidding, but he really wasn't.
We hear you.
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