The Oil Price Decline Is Due To Speculators, Says Saudi Arabia's Energy Minister

 The Oil Price Decline Is Due To Speculators, Says Saudi Arabia's Energy Minister

Both Brent and WTI have dropped by more than $10 in the recent sharp drop in oil prices, indicating a major change in public opinion.

The minister of energy for Saudi Arabia has said that the current decline in oil prices is the result of oil speculators misinterpreting the oil market.

Concerns about demand were raised by Saudi Arabia's recent decision to maintain the price of Arab Light shipments to Asia while extending its production cutbacks until the end of the year.

Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman has said that despite the country's strong oil demand, oil speculators are to blame for the recent decline in crude oil prices worldwide.

Bin Salman said categorically, "Demand is not weak." People act as if it is feeble. It's all a ruse.

Traders and oil speculators have been the target of repeated attacks from the Saudi Energy Minister, who warned them earlier this year that anybody betting against crude oil would be "ouching like hell." It is just one cautionary tale.

Some have attributed the recent decline in price on the sluggish demand for crude oil. However, bin Salman claims that some in the oil market have been misinterpreting the signs of rising OPEC member country oil exports in recent months and how those exports connect to their production.

According to bin Salman, shipments are seasonal, often declining in the summer and increasing in September and October. However, he cautioned that this should not be interpreted as variable output, calling it "an abuse of numbers."

The Shandong province, China's autonomous refinery powerhouse, requested from Beijing an additional 3 million metric tons of fuel oil import quotas for the remaining part of the year, indicating high demand even as refiners struggle to increase production. The proposal might increase this year's oil import allowance to if it is accepted.

Thursday morning saw a 1.17% increase in oil prices, but week over week, they had dropped by more than $6 per barrel. This month, WTI and Brent have both dropped dramatically; WTI is now trading at $76.45 and Brent is at $80.66.

Saudi Arabia said on Wednesday that it will continue its voluntary 1 million barrels per day reduction in crude oil output until the end of the year. The statement was perceived by the market as a criticism of the demand for crude oil. This combined with Saudi Arabia's decision to maintain the official selling price of crude oil to its most valuable market, Asia, raised even more questions about the country's actual outlook for future oil demand.