OPEC May Cut Production In Response To "Disconnected" Market

Saudi Arabian Energy Minister Prince Abdulaziz bin Salman has said in an interview with Bloomberg that, “extreme volatility [is] undermining the market’s essential function of efficient price discovery."

• OPEC says it has means to confront the market challenge, including by cutting output.
• Prince Abdulaziz: "In OPEC+ we have experienced a much more challenging environment in the past and we have emerged stronger... OPEC+ has the commitment, the flexibility, and the means within the existing mechanisms of the Declaration of Cooperation to deal with such challenges and provide guidance including cutting production at any time and in different forms as has been clearly and repeatedly demonstrated in 2020 and 2021."
• Prince Abdulaziz: "Soon we will start working on a new agreement beyond 2022 which will build on our previous experiences, achievements, and successes. We are determined to make the new agreement more effective than before. Witnessing this recent harmful volatility disturb the basic functions of the market and undermine the stability of oil markets will only strengthen our resolve."
• Prince Abdulaziz claims the disconnected market is, "amplified by the flow of unsubstantiated stories about demand destruction, recurring news about the return of large volumes of supply, and ambiguity and uncertainty about the potential impacts of price caps, embargoes, and sanctions."