Chorus Effect Muddies Saudi Oil Messaging

摘要

A few weeks ahead of informal Opecon-Opec talks in Algeria, at a time of great uncertainty for oil markets, the shrewd observer, trader or analyst would normally filter out the noise and focus on the one voice that really counts - Saudi Arabia's. No deal is possible without Riyadh's backing, and Saudi signals ahead of Opec gatherings often provide guidance for oil markets. But this time, there are too many Saudi voices sending too many confusing signals, with the most important voice, Deputy Crown Prince Mohammed bin Salman, so far opting for silence (PIW Aug.29'16). Few were paying much attention earlier this year when Prince Mohammed said twice in the run-up to April's Opec/ non-Opec meeting in Doha that a deal without Iran was not going to work - but his view prevailed. The prince has not yet publicly said anything regarding the looming Algiers meeting, and messages from other officials have been confusing. Saudi Energy Minister Khalid al-Falih issued a comprehensive press release last month saying that the kingdom stands ready to discuss 'any possible action' to stabilize markets, which some took to mean the Saudis were open to rekindling the freeze deal that collapsed in Doha (PIW Aug.22'16). But he later appeared to rule out joint action, saying a freeze was not necessary and that the market would balance on its own. That appeared to clash with the position of Saudi Foreign Minister Adel Jubeir, who has said repeatedly in recent weeks that a production freeze was a good idea. That said, he has also stuck to Prince Mohammed's demand that Iran participate - which, as in Doha, looks unlikely.