Oil rallies on Saudi Minister’s remarks, inventory drawdown

Oil has been buoyed by comments from Saudi Oil Minister, Prince Abdulaziz bin Salman, who warned Oil speculators to “watch out” and that they might suffer as they did “in April”. His comments have been taken as warning to short-sellers that the Oil price might rise.

Abdulaziz defended OPEC and its decision to cut production by 2 million barrels per day (bpd) at its meeting in October 2022. Given the Oil price is at similar levels to October, it may suggest there is a risk the cartel will announce another supply cut in June.

Oil continues to be underpinned by optimism that a deal will be reached on the US debt ceiling. Oil price continues to rally after Saudi Prince Abdulaziz bin Salman, the country’s Oil minister, warns short-sellers to “watch out”. Inventory data from the EIA shows a steep drawdown in the prior week, reflecting rising demand ahead of US driving season.

EIA inventory data showed massive inventory dropdown, shows surging Oil demand. Oil price trades roughly a percentage point higher on Wednesday after data from the US showed a dramatic fall in Oil inventories, indicating rising demand. The Oil price was given a further lift after the Saudi Oil Minister warned Oil short-sellers to “watch out” ahead of the OPEC+ meeting on June 4.

At the time of writing, WTI Oil is trading at $74.27 and Brent Crude Oil in the lower $78s. A bullish right-angled triangle has completed on the 4-hour chart, posing a challenge to the overall bear trend.