Saudi Energy Minister Says OPEC+ Has Done a Lot to Stabilize Global Energy Markets

Saudi Energy Minister Prince Abdulaziz bin Salman. (SPA)
Saudi Energy Minister Prince Abdulaziz bin Salman. (SPA)
TT

Saudi Energy Minister Says OPEC+ Has Done a Lot to Stabilize Global Energy Markets

Saudi Energy Minister Prince Abdulaziz bin Salman. (SPA)
Saudi Energy Minister Prince Abdulaziz bin Salman. (SPA)

Saudi Energy Minister Prince Abdulaziz bin Salman said the Organization of Petroleum Exporting Countries (OPEC) and its allies, referred to as OPEC+, have "done a lot" to stabilize global energy markets.

Speaking about energy security at the Abu Dhabi Sustainability Week Summit at Expo 2020 in Dubai, the minister added: "We believe we as OPEC Plus have done a lot in bringing about stability."

The minister made it clear that it is the prerogative of the US government whether to release supply from the strategic petroleum reserves.

Last November, the US administration released 50 million barrels of crude from the US Strategic Petroleum Reserve to help cool oil prices in cooperation with other countries such as China, India, South Korea, Japan, and Britain.

"This is a matter for the American government," the Saudi minister told reporters in Dubai in response to a question about whether the United States could pump more oil from its reserves, given the price hike.

Reuters reported that China would release crude oil from its national strategic stockpiles around the Lunar New Year holidays that start on February 1 as part of a plan coordinated by the US with other major consumers to reduce global prices.

Oil prices rose on Monday, with Brent crude futures at their highest in more than three years, as investors bet supply will remain tight amid restrained output by major producers with global demand unperturbed by the Omicron coronavirus variant.

Brent crude futures gained 42 cents, or 0.5 percent, to $86.48 a barrel. The contract touched its highest since October 2018, $86.71 earlier in the session.

US West, Texas Intermediate crude, was up 62 cents, or 0.7 percent, at $84.44 a barrel, after hitting $84.78, the highest since November 10, 2021, earlier in the session.

The gains followed a rally last week when Brent rose 5.4 percent, and WTI climbed 6.3 percent.

Traders said that frantic oil buying, driven by supply outages and signs the Omicron variant won't be as disruptive as feared for fuel demand, has pushed some crude grades to multi-year highs, suggesting the rally in Brent futures could be sustained a while longer.

OPEC+ are gradually relaxing output cuts implemented when demand collapsed in 2020.

However, many small producers cannot increase supplies, and others are concerned about pumping too much oil in case of renewed COVID-19 setbacks.

On Friday, US officials voiced fears that Russia was preparing to attack Ukraine if diplomacy failed. Russia, which is massing about 100,000 troops on the border with Ukraine, released pictures of its forces' movement.

Two US officials and two energy sources told Reuters on Friday that the US government held talks with several international energy companies about contingency plans to supply natural gas to Europe if the conflict between Russia and Ukraine disrupted Russian supplies.

US crude oil stockpiles fell more than expected to their lowest levels since October 2018, but gasoline inventories surged with weak demand, according to the US Energy Information Administration data.



Gold Edges Down as Markets Eye Fed's 2025 Monetary Policy Outlook

Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
TT

Gold Edges Down as Markets Eye Fed's 2025 Monetary Policy Outlook

Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo

Gold prices edged lower as the dollar held firm on Wednesday, with investors awaiting a key US Federal Reserve decision expected to shape market sentiment and gold's trajectory by outlining the central bank's 2025 outlook.

Spot gold slipped 0.3% to $2,637.13 per ounce by 10:00 a.m. EST (1500 GMT). US gold futures were down 0.3% at $2,653.20.

The Fed's 2025 economic projections and decision are due at 2 p.m. EST (1900 GMT), followed by Fed chair Jerome Powell's press conference at 2:30 p.m. EST, Reuters reported.

"What markets will truly focus on is the tone set by Jerome Powell. A hawkish stance could drive Treasury yields higher and bolster the dollar, putting downward pressure on gold prices," said Ricardo Evangelista, senior analyst at ActivTrades.

"Conversely, a more cautious tone might provide some support for bullion."

While markets are pricing in a 99% probability of a 25 basis point rate cut during this meeting, the chances of another reduction in January stand at only 17%.

Non-yielding gold tends to do well in a low-interest-rate environment.

Traders are also watching out for key US GDP and inflation data due later this week that could further shape expectations around monetary policy.

"I do see the consolidation as a continuation pattern within the longer term uptrend in gold. I think that trend will re-exert itself in the first quarter of 2025," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Grant highlighted that bullion remains underpinned by easing central bank policies, geopolitical tensions, sustained buying by central banks, and rising global political instability.

UBS echoed this sentiment in a note, predicting gold would "build on its gains in 2025." The bank emphasized that central banks are likely to continue accumulating gold as they diversify reserves, while heightened demand for hedges could drive inflows into gold-backed exchange-traded funds (ETFs).

Spot silver fell 1.1% at $30.19 per ounce, platinum slipped 1.3% to $926.90, while palladium declined 1.3% to $922.19.