Oil gains as market absorbs Saudi warning to short sellers
BNN Bloomberg
Oil fluctuated as traders weighed an unresolved U.S. debt-limit and mostly shrugged off a warning by Saudi Energy Minister Prince Abdulaziz bin Salman to short-sellers.
West Texas Intermediate for July traded near US$73 a barrel, following a 0.5 per cent gain on Monday, after Saudi Arabia’s top energy official warned oil short-sellers at the Qatar Economic Forum: “I keep advising them that they will be ouching — they did ouch in April”. Saudi Arabia, the de facto leader of the OPEC+ cartel, was among nations that surprised the global crude market recently with a supply cut that started to take effect from this month.
Earlier, U.S. House Speaker Kevin McCarthy said he and President Joe Biden a deal to avert a default has yet to be struck, despite saying talks were productive. Before the meeting, Treasury Secretary Janet Yellen had warned it was now highly likely her department would run out of sufficient cash in early June.
Both economic and supply threats have emerged in the market. A standoff over the debt ceiling could put strain on the U.S. economy and impact oil demand just as OPEC and its allies prepare to review production targets on June 3-4 in Vienna. Prince Abdulaziz’s warning Tuesday raises the prospect that more cuts can be in store, after the oil cartel justified its April surprise trim as an attempt to stop speculators.
