Saudi Arabia is considering reducing oil production somewhat, rather than opening the oil tap further. According to Saudi Energy Minister Prince Abdulaziz bin Salman, the situation in the oil market seems increasingly far from reality. As a result, the minister said, Saudi Arabia and OPEC may have to step in.
Bin Salman has not announced any concrete plans, for example, to cut production. But he feels that the current oil price is no longer a good reflection of market supply and demand.
“Paper and physical markets are increasingly becoming separate,” he said after questions from Bloomberg News. “In a sense, the market is in a state of schizophrenia, and that creates a kind of yo-yo market.”
The price of a US barrel of oil (159 liters) is now about $90. This is lower than it was before the Russian invasion of Ukraine in February. Earlier this year, oil prices rose sharply due to the war in Ukraine, but the past few months have seen a decline.
Analysts recently noted that oil trading has been more volatile lately than before. Traders fear that recession in the US and Europe will hurt oil demand, putting pressure on prices. Saudi Arabia and OPEC have gradually increased oil production this year. However, oil prices are still much higher than in recent years. Motorists note this at the pump.
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