OPEC’s leading oil producer, Saudi Arabia, says the recent oil price decline is by poor futures market liquidity; and macro-economic fears, which have ignored the extremely tight crude supply.
This was disclose by Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman in an interview with Bloomberg.
Prince Abdulaziz also stated that the oil futures market has fallen into “a self-perpetuating vicious circle of very thin liquidity and extreme volatility”; making the cost of hedging and managing risks for market participants prohibitive.
On concerns about a slowdown in the Chinese economy and a possible recession in the West; oil prices have fallen in recent weeks from as high as $120 per barrel to about $95 per barrel.
