The prominent OPEC+ oil producers' alliance is awaiting concrete central bank action on interest rates before factoring in the potential impact on the energy demand landscape, according to Saudi Arabia's energy minister.
"Central banks, with all respect, they're flip-flopping ," Prince Abdulaziz bin Salman said during a Sunday press briefing, in response to a question on whether OPEC+ supply cuts could reinject inflationary pressures worldwide, at a time when central banks are reining in consumer price increases and shyly inching toward possibly cutting interest rates.
The production strategy decisions come at a time when OPEC's own forecasts show a 2.25 million barrel-per-day increase in demand, according to the Monthly Oil Market Report of May. The imminent summer driving season and the end of refinery maintenance in China are also set to exacerbate the call on crude in the short term.Energy costs spiked worldwide in the wake of Russia's full-fledged invasion of Ukraine, aggravating the economic downturn that followed the Covid-19 pandemic.
"Show me any central banker who a determination to give people a trajectory of when and where and how they are going to bring interest rates down," Saudi Arabia's Abdulaziz bin Salman said amid the ongoing ambivalence, stressing that the group awaits"more certainty on the overall economic trajectory that will probably cause demand to increase with a clear path."
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