Saudi Arabian Energy Minister Prince Abdulaziz bin Salman said “extreme” volatility and lack of liquidity mean the futures market is increasingly disconnected from fundamentals, and as a result, OPEC+ may be forced to cut production to balance the market, Bloomberg reports.
The comments, which come after months of soaring prices which have cooled in recent weeks, sent oil futures higher.
“The paper and physical markets have become increasingly more disconnected,” he said in response to written questions from Bloomberg News.
“Witnessing this recent harmful volatility disturb the basic functions of the market and undermine the stability of oil markets will only strengthen our resolve,” he said, according to reports.
Saudi Arabia and the rest of the OPEC+ group have steadily increased production this year, reversing all of the cuts made during the coronavirus pandemic.
