Saudi Arabia's Energy Minister, Prince Abdulaziz bin Salman has warned traders, again, against shorting oil futures, less than two weeks before the OPEC+ panel on production policy meets on June 4.
Prince Abdulaziz bin Salman promised oil speculators back in 2020, "I'm going to make sure whoever gambles on this market will be ouching like hell."
The OPEC+ cuts announced in early April this year caught speculators by surprise and threw the short sellers under the bus.
Amid the oil price selloffs following the banking sector jitters in March, top OPEC+ officials had spent weeks reassuring market participants that the plunge in oil didn't warrant any tweaks to the production cuts agreement. Until they decided it did.
The announcement of the cuts in April came when markets were closed, and OPEC+ has undoubtedly bet on a jump in oil prices the moment the markets opened. Oil soared by $6 per barrel on the Monday following the announcement, the biggest single-day surge in prices in over a year. A week after the announcement, data from exchanges showed a massive short covering and a renewed buying spree in oil futures in the two days after OPEC+ said it would keep another more than 1 million bpd off the market for the rest of the year.
The most recent positioning data, for the week ending May 16, showed that traders continue to be bearish on crude and continue to dump bullish bets.
Near-term concerns about the economy and the growing fears of recession, coupled with the U.S debt ceiling saga, have turned the sentiment on the market more bearish than it has been since 2011.
But the Saudi energy minister warned traders against shorting oil.
"I keep advising them that they will be ouching - they did ouch in April," Abdulaziz bin Salman said at the Qatar Economic Forum on Tuesday, as carried by Bloomberg.
"I would just tell them: Watch out!"
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More