Markets await the next meeting of the Organization of the Petroleum Exporting Countries (OPEC) at the ministerial level on June 4 to decide on future oil policy amid growing speculation of new production cuts.
Days before the meeting,
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said on Tuesday he would inflict more pain on short sellers and told them to watch out just days before a planned OPEC+ meeting to decide on future oil policy.
“Speculators, like in any market are there to stay, I keep advising them that they will be ouching, they did ouch in April, I don’t have to show my cards… but I would just tell them to watch out,” he told the Qatar Economic Forum organized by Bloomberg.
Reuters quoted some investors as saying the Saudi minister’s words were a sign that the OPEC and its allies, including Russia, may consider announcing more production cuts at the next meeting.
Saudi and other OPEC+ producers announced surprise voluntary production cuts in April, coinciding with a banking crisis that hit oil demand.
The minister said the coalition would continue to work proactively and preventively and hedge against future events regardless of any criticism.
“We must be brave enough to care about the future without continuing … “Procrastination policies that may allow us to manage the situation for this month or next month or the next, but still lose sight of our intentions and our most important goals.”
The prince added that the OPEC+ alliance will continue to play the role of responsible market regulator.
He again blamed the Paris-based International Energy Agency (IEA) for misleading the market with its initial forecast of a three-million-barrel-per-day drop in Russian output against the backdrop of the war in Ukraine.
“Look who’s the biggest contributor to trying to raise speculation, data, and forecasts that really led to most of the volatility we’ve seen in 2022 and still are?” Prince Abdulaziz said.
“There’s an organization called the International Energy Agency, which I think has proven that it takes a really special talent to be constantly wrong.”
In its monthly oil market report released last week, the IEA raised its forecast for oil demand for 2023 by 200,000 barrels per day to 102 million bpd and indicated that the oil market will face a supply crisis during the second half of the year.
Meanwhile, oil prices rose on Wednesday after data showed falling oil and fuel inventories in the United States, along with growing speculation of new production cuts.
Read: Oil prices rebound as US default fears ease
Brent crude futures rose 86 cents, or 1.1 percent, to $77.70 a barrel, while U.S. West Texas Intermediate crude rose 88 cents, or 1.2 percent, to $73.79 a barrel, according to Reuters data.
Data from the American Petroleum Institute late on Tuesday showed a sharp drop in U.S. crude and fuel inventories.
Market sources quoted the institute as saying that crude inventories fell by about 6.8 million barrels in the week ended May 19, gasoline inventories fell by about 6.4 million barrels, while distillate inventories fell by about 1.8 million.
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