Saudi Arabia’s Energy Minister Abdul Aziz said the “extreme” volatility and lack of liquidity in futures markets was driving oil prices further out of fundamentals, pushing OPEC and non-OPEC majors He said it might force OPEC+, a group of oil-producing countries, to act.
“There is a growing disconnect between the futures and physical markets,” Abdulaziz told Bloomberg News in a statement.
Abdul Aziz, representing Saudi Arabia, OPEC+’s largest oil producer, is arguably the most important figure in the 23-member coalition. He said futures prices do not reflect underlying supply and demand fundamentals and OPEC+ may need to tighten production when it considers output targets at its meeting next month.
“We are seeing recent harmful volatility impede the basic functioning of the market and undermine the stability of the oil market. This will only strengthen our resolve,” he said.
Crude oil futures benchmark prices have fallen in London and New York over the past few weeks. Concerns over the outlook for the global economy and a possible increase in supply of Iranian oil fueled the selling. Brent crude futures, which were above $120 a barrel in June, dipped below $93 on Thursday.
news-rsf-original-reference paywall">Original title:
news-rsf-original-reference paywall">Saudi Prince Says Oil Futures Disconnect May Force OPEC+ Action(excerpt)
