Saudi Arabia’s Minister of Energy, Industry and Mineral Resources Khalid Al-Falih met in private with some of the world’s top commodity hedge funds in July, a break from tradition in order to gather investor views on the state of the market, Bloomberg reports.
In the past Saudi Arabian officials have criticized the role of speculators and hedge funds in the oil market as undermining OPEC’s quest for market stability. In 2012, when oil had surged to nearly three times the current value on international markets, Saudi Arabia’s then-energy minister Ali Al-Naimi blasted speculators as a threat to high prices. “You know my desire is that people leave the market alone,” Naimi said in an interview. “You know why? Because everybody now is happy with where the prices are. Nobody is complaining about high prices or low prices.”
That was then, and now, 5 years later, persistent low oil prices on international markets have taken a toll on Saudi Arabia’s fiscal position and created greater urgency on advancing its ambitious Vision 2030 economic and social reforms.
According to Bloomberg, Minister Al-Falih met with Pierre Andurand, the founder of an eponymous fund with more than $1 billion in assets, and Jonathan Goldberg, the former Goldman Sachs Group Inc. trader who founded BBL Commodities LP, citing people with knowledge of the meetings who spoke with Bloomberg. He also met with traders including Alex Beard, the head of oil at Glencore Plc, the world’s largest commodities house.
Al-Falih, who attended Texas A&M University to earn a bachelor’s degree in mechanical engineering in 1982, rose to the top ranks of Saudi Aramco before being tapped to his current position. Al-Falih also holds the position of chairman of the Board of Directors of Saudi Aramco.
Although Saudi officials have met in the past with hedge funds representatives, it’s the first time meetings involving the minister have been reported, according to Bloomberg.