As Saudi Arabia blames US short-sellers for weighing down oil prices, its bigger concern should be competition from OPEC+ ally Russia, said veteran industry analyst Paul Sankey.
(Bloomberg) — As Saudi Arabia blames US short-sellers for weighing down oil prices, its bigger concern should be competition from OPEC+ ally Russia, said veteran industry analyst Paul Sankey.
“I don’t know why they’re so obsessed with speculators,” the founder of Sankey Research LLC said during a Bloomberg Television interview. “The real issue is: Can the Saudis corral Russia?”
Saudi Energy Minister Prince Abdulaziz bin Salman on Tuesday issued a warning to short-sellers, prompting some investors to exit bearish bets and sending prices for the US oil benchmark surging. But “the real problem is the overall oil balance,” not speculators, Sankey said, adding that Saudi Arabia’s focus on traders is like “crying wolf.”
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Instead, it’s the export of Russian crude to Asia that’s eroding Saudi Arabia’s long-term premium in the region, he said. “This is a much bigger deal than people appreciate between Russia and Saudi here in terms of market share and competition,” he said.
Watch the full interview here.
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