Oil prices increase as Saudi Arabia cautions speculators ahead of OPEC+ meeting

Oil prices rose on Wednesday after Saudi Arabia's energy minister warned speculators to 'watch out', implying that a decision at next week's OPEC+ meeting would increase prices, combined with increased hopes for a demand rebound in the US, the world's largest oil consumer.

International benchmark Brent crude traded at US$77.40 per barrel in morning trade in London, a 0.73 per cent rise from the closing price of US$76.84 a barrel in the previous trading session on Friday.

The US benchmark West Texas Intermediate (WTI) traded at the same time at US$73.60 per barrel, up 0.94 per cent from the previous session's close of US$72.91 per barrel.

Prices rallied by more than US$1 per barrel in early Asian trade on supply concerns, as Saudi Arabia's Energy Minister Abdulaziz bin Salman warned short sellers on Tuesday of the increased possibility of OPEC intervening in the oil market to boost prices.

“Speculators, like in any market, they are there to stay. I keep advising them that they will be ouching; they did ouch in April. I don't have to show my cards; I'm not a poker player... but I would just tell them to watch out,” Salman said.

Prices also saw upward support late Tuesday when the American Petroleum Institute (API) announced an estimated decrease of 6.8mn barrels in US crude oil inventories, more than the market expectation of a 525,000-barrel rise.

A strong inventory decrease implies an uptick in crude demand in the US, easing market worries over falling demand.

The US Energy Information Administration's (EIA) data on oil stocks will be announced later on Wednesday, and if the increase in stock levels is confirmed, prices are expected to decline.