Oil hits $64/b on Saudi crackdown

Oil prices rose more than 3 per cent yesterday, hitting 30 months high, as Saudi Arabia’s crown prince cemented his power over the weekend with an anticorruption crackdown, while the U.S. rig count fell and markets continued to tighten.

Brent crude futures LCOc1 were trading above $2 or 3 percent higher at $64.16 a barrel by 2:35 p.m. GMT, data from Bloomberg shown.

U.S. West Texas Intermediate (WTI) crude CLc1 also rose to $57.22 a barrel.

Both benchmarks are at their highest since early May 2015.

Saudi Crown Prince Mohammed bin Salman tightened his grip with the arrest of royals, ministers and investors, including billionaire Alwaleed bin Talal and the powerful head of the National Guard, Prince Miteb bin Abdullah.

The arrests, which an official said were just “phase one” of the crackdown, are the latest in a series of dramatic steps by Crown Prince Mohammed bin Salman to amass more power for himself at home.

The attorney general said on Monday detainees had been questioned and “a great deal of evidence” had been gathered.

Analysts for now do not see Saudi Arabia, the world’s largest oil exporter, changing its policy of boosting crude prices.

Prince Mohammed’s reforms include a plan to list shares of parts of stateowned oil company Saudi Aramco next year, and a higher oil price is seen as beneficial for its market capitalization.

Reuters said Saudi Energy Minister Khalid al-Falih said that while there is “satisfaction” with a production-cutting deal between the Organization of the Petroleum Exporting Countries and other producers led by Russia, the “job is not done yet.”

OPEC is expected to extend a cut of around 1.8 million barrels per day into the whole of 2018.

On Monday Nigeria’s oil minister Emmanuel Ibe Kachikwu told Reuters that Nigeria supports an extension of a deal between OPEC, Russia and other non-members to cut oil supply until the end of 2018 “as long as the right terms are on the table” regarding its own participation.