Saudi Go Bottom-Fishing in Buying Oil Stocks

Saudis National Sovereign Wealth Fund, the Public Investment Fund (PIF), reportedly purchased US$ 1 billion shares of major European oil companies in a bottom-fishing attempt.

According to reliable sources, PIF has purchased shares of Equinor ASA, Royal Dutch Shell PLC, Total SA and Eni SpA on the open market in recent weeks. The fund bought about US$200 million of Equinor shares, while the specific amount purchase for the other three companies have not yet been announced.

The idea of bottom-fishing in oil market has gain wider appeal after this years oil price war and the consequent heavy slump of crude.

As OPEC + production reduction agreement was finally signed, markets bullish sentiment over oil market has more or less recovered. In the past month, crude oil net holdings in several of the world's largest actively managed ETFs targeting crude oil have altogether grown by more than 400%, which is a sign of capital inflows.

On Tuesday, investors increased their holdings of the United States Oil Fund LPs stock by US$371 million to the highest level since 2008.

However, so far most of the bullish bets are still losing money, and WTI fell to its lowest level since 2002 on Wednesday. However, in the long run, with the implementation of the OPEC + production cut and the adaptations of US, oil market is expected to regain balance fundamentally.