When Ali Naimi, Saudi Arabia’s veteran oil minister, wrote in the Financial Times in late March that the kingdom wanted “lower oil prices”, some analysts and traders doubted Riyadh’s determination.
Two months later, it is clear that Saudi meant business: production is climbing above 10m barrels a day and Saudi Aramco is offering attractive prices so refiners take the barrels – either for consumption or storage.
Crude oil stocks in OECD countries have been rising for the past 10 weeks, albeit from very low levels in Japan and the European Union. In the US, commercial crude oil stocks have surged to 382.5m barrels, the highest since August 1990. The stock build-up is well above the seasonal norm, confirming that Riyadh, as Mr Naimi says, is aiming to over supply the market.
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