Saudi Oil Minister Naimi Undermined Oil Prices by Saying OPEC Would Never Cut Production

In one fell swoop yesterday, Saudi Oil Minister Ali Ibrahim Naimi betrayed the hard earned accomplishments of his OPEC and non-OPEC partners’ toward oil price stability. The recent agreement between Russia and Saudi Arabia toward a production freeze for oil really only carried weight toward stabilizing oil prices because of an underlying implication that the oil producing partners could actually cut production if need be. However, following his keynote speech at the IHS CERAWeek Conference in Houston, in a public interview, he clearly stated that a production cut was not in the cards. Oil prices immediately backtracked on that statement, and they have continued their downward trend today. I propose this simple and yet powerful comment has the ability to send oil prices back down to their prior lows, if not lower this time considering that the OPEC Put has effectively been undermined by Naimi. See my full report on how the Saudi Oil Minister's comments undermined oil prices.

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