The last time Saudi Prince Abdul Aziz hinted out at a new OPEC+ action, crude prices shot past $100 per barrel. The OPEC+ Kingpin used the words ‘extreme volatility’ and ‘thin liquidity’ to describe the market as he called for increased stability.
Now we all know that from the Saudi perspective, stable prices equal high prices…But with OPEC+ falling almost 3 million barrels per day behind its output target, the prospect of new output cuts on paper wasn’t enough to keep crude prices elevated.
Not even a month after Prince Abdul Aziz’s last market-shaking announcement, all eyes are on OPEC+ again, with oil prices settled intact right around $90 per barrel.
For those wondering what’s next, at least a part of the answer came today.
Slamming the ‘paper markets,’ the cartel said that the recent sell-off was the result of “erroneous signals” and that “heavy sell-offs in futures markets are elevating market volatility,” Reading between the lines, OPEC’s statement mimics Prince Abdul Aziz words from last month. Even as the odds of a new nuclear deal with Iran are sinking, the Saudis are reminding us that new supply cuts may be the next step in OPEC’s playbook. Oh, and for everyone who forgot, the last time the Saudi Prince warned short sellers, it didn’t end well for them.
Staying ahead of OPEC’s market maneuvers is no easy feat… Not everyone has time to dissect each and every statement the cartel issues, after all. But with markets in a state of chaos, staying being informed is now more critical than ever.
