Oil keeps close to its maximum price in over two years as big changes in the politics of the largest oil producer – Saudi Arabia, echoed across a market with prices already high up propped by supply tightening campaign.
Investors have turned to crude in view of a major rearrangements in the governing elite of Saudi Arabia, where Crown Prince Mohammed bin Salman is expected to strengthen his positions as a leader, being in favour of prolonging OPEC’s production cuts implemented to end a global oversupply.
The shake-up has given the reason for worries over uncertainty in the country, and contributed to ideas of a geopolitical-risk premium on oil, which had appeared due to tensions around such oil producing countries as Iraq and Iran.
Oil prices added over 20% starting September because of supply tightening signals. What’s more, OPEC and other involved countries may continue with their decision to reduce production after March 2018.
Last week’s arrests in Saudi Arabia cleared the way for Prince Mohammed, leaving no possible competitors.
WTI futures grew by 34 cents, getting to $57.69 for a barrel in New York and was almost unchanged in London this morning.
Brent futures dipped to $64.15 for a barrel, losing 12 cents in Europe.