Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, has argued that the recent drop in oil prices is not due to weakened demand but rather the result of speculative trading.
What Happened: Prince Abdulaziz has dismissed allegations of a dwindling demand for oil, instead attributing the recent price plunge to speculation, reported Bloomberg.
“It’s not weak. People are pretending it’s weak. It’s all a ploy,” Prince Abdulaziz stated in Riyadh.
The energy minister also criticized market players for failing to understand the relationship between Arab OPEC nations’ increased oil exports and production.
He clarified that seasonal exports typically decrease during summer months and rise again in September and October, but these should not be misconstrued as variations in output.
“It’s an abuse of numbers” to fail to distinguish between rising exports and rising production, he said.
His remarks come at a time when Brent crude prices have hit a three-month low, falling below $80 a barrel due to concerns over supply and an uncertain U.S. economic outlook, the report noted.
Why It Matters: Earlier this month, renowned economist Mohamed El-Erian highlighted the downturn in yields and oil prices on X (formerly Twitter). He suggested this trend could potentially benefit the economy and most financial asset classes, provided it doesn’t signal a significant economic slowdown.
Meanwhile, at the end of October, the World Bank warned that escalating conflicts in the Middle East could potentially disrupt oil supplies and result in a sharp price increase.
However, at the time, the West Texas Intermediate Crude Oil Spot Price (WTI), as tracked by the United States Oil Fund, had shown minimal appreciation following the Hamas’ attacks on Oct. 7.
This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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