(Bloomberg) -- Saudi Arabia's top energy official issued another warning to oil short-sellers, just over a week before the OPEC+ alliance is due to meet.
Riyadh and its partners surprised crude traders last month by announcing output cutbacks intended to scare off speculators. Money managers have turned bearish again in recent weeks amid fears of a weaker global economy.
“I keep advising them that they will be ouching — they did ouch in April,” Saudi Energy Minister Prince Abdulaziz bin Salman said at the Qatar Economic Forum in Doha on Tuesday. “I would just tell them: Watch out!”
Oil prices have fluctuated around $75 a barrel in London this month as traders weigh a positive outlook for demand against faltering economic data from China, risks of recession in the US and a protracted battle over America's debt ceiling.
The Organization of Petroleum Exporting Countries and its allies, a 23-nation bloc known as OPEC+, will meet on June 3-4 in Vienna to review production policy for the second half of the year.
While several delegates have said there's no need for further action now as curbs already in place will help tighten global markets, Prince Abdulaziz has been known for orchestrating surprise interventions.
The latest market data shows that short-sellers, who initially fled after the shock OPEC+ cutbacks were unveiled in early April, are making a comeback. Funds have turned the most bearish in more than a decade across a slew of oil contracts.
The prince said OPEC's actions show it's a stabilizing force rather than engaged in price gouging, blaming market volatility on erroneous forecasts and policies among consuming nations — such as the release of emergency stockpiles by the US.
Iraqi Oil Minister Hayyan Abdul Ghani, speaking at the same panel session in Qatar, said that Baghdad was committed to OPEC's latest agreement to reduce supplies.
The government of the State of Qatar is the underwriter of the Qatar Economic Forum, Powered by Bloomberg.
(Updates throughout.)
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