OPEC+ has plans to deal with oil volatility: Saudi Arabia
Saudi Energy Minister HRH Prince Abdulaziz bin Salman said, on Monday, that the fluctuation of oil markets and poor liquidity “give wrong signals to the markets.” He stressed that the “OPEC+” alliance can deal with challenges by several means, including “the possibility of reducing production at any time and in different ways.” He announced the start of work “soon” on drafting a new agreement beyond 2022.
Prince Abdulaziz bin Salman, in statements to “Bloomberg”, and also reported by the Saudi Press Agency “SPA”, said that “the oil futures market has fallen into a vicious and recurring negative cycle consisting of severe poor liquidity and volatility in the markets that together undermine the most important basic functions.” market; namely, to effectively access appropriate and correct prices.
Benchmark crude oil futures have fallen significantly recently in London and New York amid concern about the outlook for the global economy and the potential for Iranian oil to reach the market.
Regarding the fluctuating performance of the markets, Prince Abdulaziz bin Salman described the situation as “extremely harmful.”
He stressed that the current situation “is a market that suffers from fluctuations between rise and fall”. He also pointed out that it also “sends wrong messages at a time when there is an urgent need for more transparency and clarity.”
The Saudi minister pointed out that the “OPEC+” alliance faced “more challenging situations in the past, and emerged from it more robust and coherent than ever before,” noting that it “has become more committed and flexible.”
He announced that the alliance will begin “soon to formulate a new agreement beyond this year,” stressing that it “will continue to build on its previous experiences, achievements and successes.”
This comes in conjunction with a 4% drop in oil prices during Monday’s trading, but oil trimmed its losses after the statements, bringing “Brent” crude down 1.26% at $95.5 a barrel, while US crude fell 0.94% at $89.92.
Oil is falling on concerns that large increases in US interest rates may lead to a global economic slowdown and undermine fuel demand, according to “Reuters“.
