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Oil Up As Saudi Minister Tells Traders Not To Gamble With OPEC

Published 09/17/2020, 02:54 PM
Updated 09/17/2020, 02:55 PM
© Reuters.

© Reuters.

By Barani Krishnan

Investing.com - Crude prices rallied for a third straight day on Thursday as OPEC+ appeared to have full cooperation from its partners on production cuts to support the market, with de facto leader, Saudi Arabia’s energy minister, even warning traders not to gamble against the alliance.

“Those who want to gamble on the oil market will be ouching like hell,” said Prince Abdulaziz bin Salman, who decides on the energy policy of the world’s most influential oil producing country, said, adding: “I will make this market jumpy.”

Just two days ago, the Saudi-steered and Russia assisted alliance of 23 oil producing nations seemed to be in a flux over how to handle a sudden collapse in crude prices to below the key $40 per barrel level due to continued fallout for energy demand from the coronavirus. 

The end of the peak summer driving season in the United States has also cast doubts about gasoline consumption, while some OPEC+ members such as Iraq — and most notably Russia — were falling short of production cuts pledged in April.

The Paris-based International Energy Agency said on Monday that it expects global oil demand growth to fall by 8.4 million barrels per day year-on-year to 91.7 million bpd. That is a deeper contraction than the 8.1 million bpd decline previously estimated.

In fact, OPEC itself announced this week a lower forecast for oil demand growth, citing weaker-than-expected recovery in India and other Asian countries, and warning that risks remain “elevated and skewed to the downside” for the first half of next year.

In a closely-watched monthly report published Monday, the Vienna-based group downwardly revised its outlook for global oil demand to an average of 90.2 million barrels per day in 2020. That’s down 400,000 bpd from the previous month’s estimate and reflects a contraction of 9.5 million bpd year-on-year.

But in Thursday’s live streamed virtual meeting, Prince Abdulaziz along with Alexander Novak and Suhail Mohamed Mazrouei, his counterparts from Russia and UAE, respectively, sought to assure that all the “cheaters” within OPEC will make up for production quotas flouted recently. 

The alliance also committed to continue the April agreement into December despite some like the Saudis deciding to raise output.

Oil traders responded favorably to the group’s maneuvers.

New York-traded West Texas Intermediate, the key indicator for U.S. crude price, settled the day up 81 cents, or 2%, at $40.97 per barrel. With the gains of the past two days, WTI is already up more than 10% on the week, offsetting a chunk of the combined 13% loss of the past two weeks.

London-traded Brent crude, the global benchmark for oil, was up $1.21, or 2.9%, on the day at $43.43 per barrel by 2:45 PM ET (18:45 GMT). For the week, it rose 8.7%.

 

Latest comments

“Ouching like hell” translation: Oil will plummet soon. Everyone buy contracts so I can lock in prices & then dump my oil in December-January! Typical Goldman trick, bring in all the buyers near the top & dump
Desperate struggles of a has been. Earlier this year they have shown there's an abundance of capacity, and at the same time demand is hit, some of the hit will recover over the next years, some of the demand will never come back or will be replaced by other sources. Eventually Saudi will also have to pump more, they don't have endless cash reserves and they are dwindling fast, pumping half at half price leaves them with 25% of what they used to have. Give it a year and they'll be forced increase production, and neither price nor demand will have recovered by then. They better very soon find themselves something else to generate income from or they are doomed. And that applies to most of the countries relying heavily on oil income.
another psychopathic fascist dictator.
Hey LK, where did you learn language? And where did you even come up with this theory that people don't like cheap oil? You know anyone who doesn't want to shave some money off the pump price of gasoline? High oil prices hurt entire economies; it's different from gold, which is commonly a luxury purchase or an investment hedge. That's the reason why even Trump once fought OPEC -- to help the US economy -- though he's abandoned that war now because he's struggling on other fronts. Learn some economics before you start a debate here.
struggling on other fronts? All his worries will be over january 20th
driving season, making the marker jumpy...keep it simple, demand goes down and will rise. You have to adjust the supply for each.
*market
if he want to make it jumpy, nothing is stopping him from Shutting the Valves
haha talk is cheap. u think the traders care what he says.
 never mate. probably they will bet against his words now
his last hope ?
 his brother betray him this time.
 He tried to make it sound like a pun, but the language itself is so dictatorial.
 Ali Naimi was pure class as Saudi Energy Minister; ABS is pure crass. Stick to the theme. Don't stray.
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