OPEC+ output cut decision shows willingness to use all tools to support market stability: Energy Minister

Saudi Energy Minister Prince Abdulaziz bin Salman

Saudi Energy Minister Prince Abdulaziz bin Salman emphasized that OPEC+ does not target prices or prices ranges. saying, “Its (OPEC+) aim is to support market stability and supply and demand balance for the benefit of market.”

In an interview with Energy Intelligence, Prince Abdulaziz described the recent OPEC decision as “an expression of our willingness to use all of the tools in our kit, Saudi Press Agency reported.

This simple tweak shows that we are attentive, pre-emptive and proactive in terms of supporting the stability of the market to the benefit of market participants and the industry," he stated. 

Speaking on the main causes of the current volatile market, the minister said, “There is a self-perpetuating vicious circle in the paper market of extreme volatility and very thin liquidity.

“This has undermined the market’s essential function of efficient price discovery, with prohibitive costs for users of hedging and risk management techniques in oil and other commodities, creating new types of risk and instability," he added.

“This cycle is exacerbated by speculative reports and analysis about demand destruction, possible return of large supply volumes, and measures related to price caps, embargoes and sanctions,” he added.

Pointing out to global recession, Prince Abdulaziz said, “We are seeing mixed signals in relation to economic growth from different parts of the world, and there has been a tendency towards exaggeration in some of the negative analyses of the global economic situation.”

He stressed also that historical data indicates that you could have recessions with limited oil demand contractions and in fact you could even have demand growth in recession years, as was the case in 1991.

OPEC and OPEC+ ministers decided on Sept. 5, to return oil production for October to August levels, according to Argaam's data.