Saudis Warn Traders Against Shorting Oil

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

OPEC+, a 23-nation group led by Saudi Arabia and Russia, decided on Dec. 2 to raise daily crude 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’s soared about 45% this year with economies rebounding from the worst of the coronavirus pandemic, it slumped more than 10% on Nov. 26, the day after Thanksgiving. That was mainly due to the discovery of the omicron variant of the virus.

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.”

The next OPEC+ meeting, to decide on production for February, is scheduled for Jan. 4.