Saudi Arabia want markets to remember that OPEC+ is in control, energy analyst Amrita Sen told CNBC. “We’ve had mostly algos trading this market, and you’ve seen huge volatility,” she said. The Saudi government has signaled in recent days the OPEC+ could cut production. Loading Something is loading.
Saudi Arabia is signaling to oil market that OPEC+ is still firmly in control, a top energy analyst told CNBC on Wednesday.
Saudi Energy Minister Prince Abdulaziz bin Salman told Bloomberg on Monday that OPEC+ could cut oil output as markets are currently experiencing “schizophrenia” and becoming increasingly disconnected from fundamentals.
Energy Aspect’s chief oil analyst Amrita Sen echoed his warning of dysfunction in oil markets, noting that it is “going off on random headlines” with even bullish news interpreted bearishly.
“We’ve had mostly algos trading this market, and you’ve seen huge volatility,” Sen said. “All Prince Abdulaziz is trying to say to the market is that, ‘Look, yes there are concerns about a recession. Now, there are even rumor or concerns around a potential return of Iran. But Saudi Arabia and OPEC+ will continue to make sure that the market is stable.'”
Oil prices have fallen sharply in recent months, and signs of progress in the past week on the Iran nuclear agreement has added downward pressure. Analysts have estimated that reviving that deal would allow Iran to add about 1 million barrels of oil a day to global markets.
That drop in oil prices is what the Saudi energy minister sought to address with this message: “OPEC+ are still in control of the market, and that should not be forgotten,” Sen said on Wednesday.
Bin Salman’s comments sparked a rally in oil prices this week that gained more momentum on Tuesday when OPEC+ officials said the group could potentially cut output if an eventual deal on the Iran nuclear agreement returns its oil to the market.
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