OPEC + plays a role in containing inflation, says Saudi Arabia

(Bloomberg) – Saudi Arabia’s energy minister said the OPEC + alliance has a role to play in “tame and contain” inflationary pressures, hours after Brent crude rose above $ 75 again.

The comments come as OPEC + countries are evaluating the possibility of further increasing production in the coming months. The oil group is scheduled to meet online next week to decide its production policy for August and the months after, after increasing production from May to July.

Prince Abdulaziz bin Salman said Wednesday at a conference organized by Bank of America Corp. that “we also have a role in taming and containing inflation, ensuring that this market does not spiral out of control,” according to a recording of his comments to the that Bloomberg News had access to.

But the minister also warned that it was unclear whether oil prices were rising due to “real supply and demand” or “excessively optimistic expectations and trajectories.”

A representative for the Saudi Energy Ministry did not immediately respond to a request for comment.

The comments suggest that Riyadh is walking a fine line ahead of the OPEC + meeting. Prince Abdulaziz said the group must remain cautious because oil has not emerged from the “stagnation” created by the coronavirus pandemic. At the same time, he warned operators not to confuse caution with inaction.

“We have to be cautious. But caution does not mean that we do not have to do something, “he said at the conference. “It means we have to make sure we don’t take any wrong steps here or there.”

Prince Abdulaziz acknowledged the fall in world oil inventories and the better expectations of demand during the second half of this year and until 2022. But he added that OPEC + “cannot rule out any vicious return of covid cases” and warned that the potential reactivation of production in Iran and Venezuela are great uncertainties that the group must consider.

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Original Note: Saudi Arabia Says OPEC + Has a Role in Containing Inflation

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