Saudi Arabia’s energy minister has blamed speculators for the recent drop in oil prices, saying that they are “pretending” that demand is weak and “abusing” numbers. Prince Abdulaziz bin Salman said on Wednesday that oil demand is healthy and that some market participants have been misinterpreting the seasonal fluctuations in oil exports from Arab nations in OPEC as a sign of increasing production. “It’s not weak,” he told reporters in Riyadh. “People are pretending it’s weak. It’s all a ploy.”
The prince’s comments came as oil prices fell to their lowest level in more than three months, despite the ongoing conflict in the Middle East and the voluntary production cuts by Saudi Arabia and Russia. Brent crude, the global benchmark, traded below $80 a barrel on Wednesday, down about 13% from its peak in late September. West Texas Intermediate, the US benchmark, was close to $76 a barrel, down about 15% over the same period.
Analysts have attributed the decline in oil prices to various factors, such as the weakening demand from China, the world’s second-largest oil consumer, the rising US production and inventories, and the uncertainty over the economic outlook and monetary policy in the US. Some hedge fund managers, such as Pierre Andurand, have also pointed to the larger-than-expected supplies from Iran, which has been ramping up its oil exports despite the US sanctions.
However, Prince Abdulaziz dismissed these concerns, saying that Saudi Arabia and its allies are committed to balancing the market and ensuring the stability of oil prices. He also said that Saudi Arabia is ready to increase its oil production if needed, but only in coordination with other OPEC members and their partners. “We are not going to be a lone ranger,” he said. “We are not going to be a disruptor.”
The prince’s remarks echoed his criticism of speculators in May, when he accused them of creating a “fake market” and warned them to “make my day” by betting against Saudi Arabia. A few weeks later, the kingdom announced a surprise cut of one million barrels per day in its output, sending oil prices soaring. The next meeting of OPEC and its allies, known as OPEC+, is scheduled for December 2 in Vienna, where they will decide on their production policy for the next year.
Source: Bloomberg
