Oil gets lift as Saudis maintain status quo
LONDON Oil prices rose on Monday after the new Saudi energy minister, Prince Abdulaziz bin Salman, confirmed expectations that there would be no radical change in his country’s oil policy.
Prince Abdulaziz, son of Saudi King Salman and a long-time member of the Saudi delegation to the Organization of the Petroleum Exporting Countries, replaced Khalid al-Falih on Sunday.
Global benchmark Brent crude futures were up 69 cents at US$62.23 a barrel by 1:43 Greenwich Mean Time, while U.S. West Texas Intermediate gained 95 cents to US$57.47.
Speaking on Monday, Prince Abdulaziz said the pillars of Saudi Arabia’s policy would not change and that a global deal to cut oil production by 1.2 million barrels per day would survive.
He added that the so-called OPEC+ alliance between OPEC and non-member countries including Russia, a partnership he helped cement, was staying for the long term.
OPEC oil output in August rose for the first month this year as higher supply from Iraq and Nigeria outweighed restraint by Saudi Arabia and losses caused by U.S. sanctions on Iran.
Abdulaziz also said the kingdom’s aim was for an initial public offering of Saudi Aramco to happen “as soon as possible.”
“I expect no deviation from Saudi policy. If anything, maybe more of a push in the direction of getting inventories down and getting the market into shape for the (Aramco) IPO,” said Robert Ryan, chief energy strategist at BCA research.
The United Arab Emirates’ energy minister, Suhail Mohamed Faraj Al Mazrouei, said on Sunday that OPEC and non- OPEC producers were “committed” to achieving oil market balance.
The OPEC+ deal’s joint ministerial monitoring committee meets Thursday in Abu Dhabi.
Trade and geopolitical tensions are affecting the market, Mazrouei said, but he was quick to rule out hasty steps influenced by the trade war between the U.S. and China.
Prices on Monday were also supported by a rise in oil imports in China in August, with shipments to the world’s biggest importer up three per cent from July and nearly 10 per cent higher in the first eight months of 2019 from a year earlier. Reuters