Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, has warned traders, again, against shorting oil futures, less than two weeks before the OPEC+ production policy panel meets on June 4.
Prince Abdulaziz bin Salman promised oil speculators back in 2020, “I will make sure that whoever plays this market is going to sizzle like hell.”
The OPEC+ cuts announced in early April this year surprised speculators and threw the short sellers under the bus.
Amid the oil price selloff following banking jitters in March, top OPEC+ officials had spent weeks assuring market participants that the slump in oil did not warrant any adjustments to the output cut agreement. Until they decided it did.
The announcement of the April cuts came as markets were closed, and OPEC+ has undoubtedly bet on a jump in oil prices the moment markets open. Oil rose $6 a barrel on Monday after the announcement, the biggest one-day gain in more than a year. A week after the announcement, data from exchanges showed massive short-covering and a renewed buying spree in oil futures in the two days after OPEC+ said it would keep another more than 1 million bpd off the market for the rest of the year.
The latest positioning data, for the week ending May 16, showed that traders remain bearish on crude and continue to dump bullish bets.
Short-term concerns about the economy and growing fears of a recession, combined with the US debt ceiling saga, have turned market sentiment more bearish than it has been since 2011.
But the Saudi energy minister warned traders against shorting oil.
“I keep letting them know they’re going to fizzle — they did in April,” Abdulaziz bin Salman said at the Qatar Economic Forum on Tuesday, which was carried by Bloomberg.
“I just wanted to tell them: Watch out!”
By Tsvetana Paraskova for Oilprice.com
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