Why Are Oil Prices Going Up?: Major Shift in Saudi Arabia Oil Price Strategy

Saudi Oil Minister Khalid Al-Falih

Reuters reports today from inside sources:

 Aramco’s initial public offering (IPO) - expected to be the biggest in history - is forcing the kingdom to rethink its OPEC policies.

Riyadh’s stance represented a shift, OPEC sources said, from its decades-old role of advocating restraint and seeking to convince fellow members like Algeria, Venezuela and Iran that prices rising too fast benefited alternative energy providers.

“Saudi Arabia is now the main price hawk,” said a high-level OPEC source. He added he was surprised how quickly the kingdom shifted from its policy of prioritizing market share, by pumping oil at full tilt, to supporting production cuts following its decision to list Aramco.

So do you really need a high-level OPEC source to be aware of this?

Not if you read the EPJ Daily Alert.

This is what I wrote in the June 1 ALERT just before the oil price started to take off:

 Accelerating price inflation is my primary reason to be bullish on oil, but as I have pointed out numerous times Saudi Arabia wants the oil price strong going into the late 2018 Aramco IPO.

They are plotting. I am confident they are watching inventory levels and will cut back as necessary to continue the general drain on inventories.

Note: Past spectacular insights and analysis do not guarantee future spectacular insights and analysis.

-RW