(Bloomberg) -- Oil demand is healthy and speculators are to blame for the recent drop in crude prices, said Saudi Arabia’s energy minister.
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“It’s not weak,” Prince Abdulaziz bin Salman told reporters in Riyadh, when asked about the decline in oil prices. “People are pretending it’s weak. It’s all a ploy.”
The minister said some participants in the oil market have been misunderstanding increases in oil exports in recent months from Arab nations in OPEC and their correlation with those countries’ production. Shipments are seasonal and tend to dip in summer, then rise again in September and October, meaning they should not be viewed as reflecting fluctuations in output, he said.
“It’s an abuse of numbers” to fail to distinguish between rising exports and rising production, said Prince Abdulaziz.
A few weeks ago, Brent crude was on the cusp of finally fulfilling industry forecasts of a return to $100 a barrel as record fuel demand and Saudi Arabia’s supply cuts depleted global oil inventories. The eruption of conflict in the Middle East shortly after heightened the risk of a price spike.
But on Wednesday the benchmark retreated to a three-month low under $80 a barrel. Concerns about supply are giving way to doubts about plunging refinery profits in China and Europe, lackluster physical cargo trading and an uncertain economic outlook for the US.
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