Opec said the recent oil sell-off was the result of “erroneous signals” as the cartel pushed back against predictions that slowing economic growth and monetary policy tightening would weigh on global crude demand into 2023.
Oil market fundamentals were “unchanged”, the producer group argued, yet hedge funds and other money managers had continued to close out bets on rising prices in the two major oil futures contracts “amid a market narrative of worsening economic and demand outlook.”
“The paper and physical markets have become increasingly more disconnected,” the cartel said in its monthly oil report on Tuesday. “This is creating a type of yo-yo market and sending erroneous signals at times when greater visibility and clarity and well-functioning markets are needed more than ever.”