Oil demand is robust—it’s oil speculators that are behind the most recent drop in global crude oil prices, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman has said.
Of demand, bin Salman said definitively, “It’s not weak. People are pretending it’s weak. It’s all a ploy.”
The Saudi Energy Minister has lashed out repeatedly at traders and oil speculators, warning them earlier this year that anyone betting against crude oil would be “ouching like hell”. It is just one of many warnings.
The recent price drop has been blamed by some on weak crude oil demand. But according to bin Salman, some in the oil market have been misreading the cues with increased oil exports from OPEC member countries in recent months, and how it relates to their production.
Shipments, says bin Salman, are seasonal, and tend to dip in the summer before rising again in September and October. But this is not to be misconstrued as fluctuating output, he warned, adding that this was “an abuse of numbers.”
In a sign of strong demand, China’s independent refinery hub, the Shandong province, asked Beijing for another 3 million metric tons of fuel oil import quotas for the remainder of the year as refiners struggle to raise output. If approved, the request could raise the oil import quota for this year to 19.2 million tons.
Oil prices were trading up by 1.17% mid-morning on Thursday, but are down by more than $6 per barrel week over week. Both WTI and Brent have fallen significantly this month, with Brent now trading at $80.66 and WTI trading at $76.45.
On Wednesday, Saudi Arabia said it would extend its voluntary production cuts of 1 million barrels per day of crude oil until the end of the year. The market interpreted that declaration as an indictment on crude oil demand. This mingled with Saudi Arabia’s move to keep the official selling price of crude oil to its prized market, Asia, the same, casting even more doubt on Saudi Arabia’s true vision of future oil demand.
By Julianne Geiger for Oilprice.com
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