Saudi Energy Minister Prince Abdulaziz bin Salman said that the “OPEC +” decision, which included a cut of about 100,000 barrels for the month of October, is an expression of the group’s readiness to use all the tools it has.
Last Monday, the “OPEC +” alliance approved a reduction in the production level of the group’s countries by 100,000 barrels per day, starting from the first of next October. This is what the minister attributed in an interview to “Energy Intelligence” published by “SPA” agency, as the willingness to use all the tools that the group has.
“This simple adjustment shows that we will be vigilant and proactive when it comes to supporting market stability and efficient performance for the benefit of market participants and the oil industry,” he said.
He added, “As the OPEC + meeting clearly indicated, this measure represents a return to the level of production in August, as the increase of 100,000 barrels per day last month was planned for the month of September only.”
Is a recession near?
And whether he sees signs of an imminent recession in the global economy, he replied: “We see conflicting signals about economic growth around the world, and there is a tendency to exaggerate some of these negative analyzes of the global economic situation. We believe that things are not resolved yet, and this confirms the need to be ready to use all the tools we have.
It is worth noting that historical data indicate that an economic recession may occur with a limited contraction in the demand for oil, and that the demand for oil may even grow in years of economic stagnation, as what happened in 1991.
On the fluctuation of oil prices, Prince Abdulaziz bin Salman said: “The oil futures markets have fallen into a vicious and recurring negative cycle consisting of market volatility and severe liquidity weakness, and together they work to undermine the most important basic functions of the market, which is the effective discovery of prices.”
He pointed out that the cycle keeps aggravating with the allegations “that are not based on real evidence about the decline in demand in the market, and the repeated news about the return of large quantities of supplies to the markets, uncertainty about the potential effects of a price cap on crude oil and its products, embargo measures, and sanctions.”
And whether “OPEC +” has any intention to defend a specific price range, he replied, “As is known, OPEC + does not target specific prices or price ranges, but rather its goal is to support market stability and balance supply and demand for the benefit of market participants and the oil industry.”
