SCHWARZMAN: The oil market is making everyone a bozo

The oil price is making a fool of everyone.

That is 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.

He said (emphasis ours):

Let’s just take energy first because it’s in on 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 stabilise 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 Thursday after briefly rising above $50 a barrel in intraday trading.

Schwarzman said his favourite 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 will 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.

NOW WATCH: Why this Instagram star withdrew $1.2 million in cash — then deposited it the next day

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.