Saudi Arabia warns traders against shorting oil prices

Saudi Arabia’s Energy Minister warned traders against shorting oil prices, saying OPEC+ could react quickly to any fall in prices.

OPEC+, a 23-nation group led by Saudi Arabia and Russia, decided on December 2 to raise daily oil output by 400,000 barrels in January. But it kept the meeting open and said it would be able to reconvene at short notice to change course.

“I call my friends every day, we chat and share notes,” Prince Abdulaziz bin Salman said in Riyadh, referring to fellow OPEC+ ministers. “So the meeting is truly not suspended. It continues to be in session.”

That strategy has helped bolster crude prices by making traders warier of taking short positions, according to analysts.

While oil has soared about 45 per cent this year with economies rebounding from the worst of the coronavirus pandemic, it slumped more than 10 per cent on November 26, the day after Thanksgiving. That was mainly due to the discovery of the omicron variant.

Brent crude has since recovered some of its losses, trading around $75 barrel on Monday.

“Thanksgiving was a Thanksgiving day for the speculators,” the minister said. “But let them dare to do another Thanksgiving. They will be ouching like hell.”