Oil rose near $73 as traders assessed a warning from Saudi Energy Minister Prince Abdulaziz bin Salman to short sellers, offsetting a lack of tangible progress in debt limit talks of the USA.
“I keep informing them that they will be wrong, they did it in April,” Saudi Arabia’s top energy official told the Qatar Economic Forum. The perceived threat was enough to push West Texas Intermediate up 2.5%, the most in nearly a week, and sharply diverged from broader market sentiment, which fell as a solution to the crisis in debt ceiling remains elusive.
“As much fun as it may be to hear the Saudi energy minister issue a warning to oil sellers, what ultimately matters is what Saudi Arabia and, more broadly, OPEC do, rather than the they say,” said Pavel Molchanov, an analyst at Raymond James. “Actions speak louder than words.”
Saudi Arabia, the de facto leader of the OPEC+ cartel, was among the nations that shocked the global crude market with a supply cut that took effect this month. Several OPEC delegates have said no further action is needed now, as the restrictions already in place will help tighten global markets. Still, Prince Abdulaziz is known for orchestrating surprise interventions.
Crude has retreated about 9% so far this year as China’s lackluster recovery since the lifting of Covid restrictions and the more aggressive monetary tightening campaign of US Federal Reserve in a generation weigh sentiment. Russian oil exports have also remained robust in the face of sanctions, with flows showing no signs of the production cuts the country insisted it was making.
Prices:
- WTI for July delivery rose 86 cents to settle at $72.91 a barrel in New York.
- Brent for July settlement gained 85 cents to settle at $76.84 a barrel.
-With the help of Sri Taylor.
