Prince Abdulaziz also warned short sellers not to challenge the kingdom’s resolve to support the market. His comments added momentum to this week’s rally, with U.S. crude up almost 10% over the week.
“I want the guys in the trading floors to be as jumpy as possible,” he said. “I’m going to make sure whoever gambles on this market will be ouching like hell.”
This week, the United Arab Emirates signaled that it would make up for pumping too much oil in the past two months, but others are dragging their heels. Iraq is exporting more crude so far in September than it shipped last month, a sign that the country is falling further behind in efforts to comply with its OPEC+ production limit.
Meanwhile, a consumption recovery remains a challenge for oil markets. During the OPEC+ meeting, the group said it sees risk to demand from a second wave of the Covid-19 pandemic and urged members to be proactive and ready to take further action.
The market got a boost on Wednesday from U.S. government data that showed a surprise draw in crude stockpiles last week. However, a slight rebound over the summer in gasoline demand has stalled with the equivalent of a million full-sized pickup trucks off the road as the virus forces Americans to stay at home.
Physical markets for actual barrels of crude are showing signs of weakness, with Bakken crude for delivery at Clearbrook, Minnesota, trading in recent sessions at its largest discount to Nymex oil futures in roughly a week. Poseidon crude erased its premium against Nymex WTI futures, trading at its weakest level in about two months.