Recent oil price fall is irrational, says Saudi Aramco chairman

The price of oil will recover in 2016 and its recent drop is ‘irrational’ the head of the Saudi state oil company said at the World Economic Forum in Davos, possibly helping to prop up crude oil futures early on Friday.

"The market has overshot on the low side and it is inevitable that it will start turning up," said Khalid al-Falih, the chairman of Saudi Aramco.

However, Saudi Arabia would not cut its supplies unilaterally, despite what he termed a “bleak” short-term outlook for oil prices.

"If prices stay low we will be able to withstand [it] for a long time," said Mr Falih.

"Obviously we don't hope for it."

Front month West Texas Intermediate crude oil futures were rising by 3.5% to $30.60 per barrel on the ICE and those for Brent by 4.1% to $30.49 per barrel.