Saudi Energy Minister Warns Oil Speculators to Be Cautious Ahead of OPEC Meeting.
In anticipation of the upcoming OPEC meeting, Saudi Arabia’s energy minister has issued a stern warning to oil speculators, urging them to exercise caution. Prince Abdulaziz bin Salman emphasized the potential repercussions for those who are betting against oil price increases and suggested that they may face adverse consequences following the meeting scheduled in Vienna on June 4.
Addressing the presence of speculators in the market, the minister acknowledged their persistent presence but advised them to brace themselves for potential losses, citing their previous experiences in April when oil prices fell. He stated, “Speculators, like in any market, they are there to stay. I keep advising them that they will be ouching; they did ouch in April.”
Despite the decision made by OPEC+ members to reduce oil output by more than one million barrels per day from early April, oil prices have experienced a decline. West Texas Intermediate Crude reached its peak at $83.09 per barrel in mid-April, while Brent hit $87.33 per barrel. However, as of Tuesday morning, they have fallen to $72.13 and $76.22 per barrel, respectively, representing a decline of approximately 13% for each.
The downward pressure on prices has been influenced by uncertainties surrounding the US economy. Nevertheless, analysts from SP Angel have pointed out that the market is now witnessing “improving fundamentals” due to limited supply and recovering Asian demand.
Fawad Razaqzadal, an analyst from StoneX, commented on the future direction of prices, stating that it remains to be seen. He concurred that the narrative of weaker demand has largely been factored into the current prices. Razaqzadal further noted that short sellers have fewer reasons now to drive prices down compared to a couple of weeks ago. He suggested that the risks are skewed towards upward movement and expressed the belief that a target of $80 for WTI is not unrealistic.
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