Oil price tops $57 a barrel

OIL PRICES have climbed $15 (R212.60) from their nadir this year to more than $57 a barrel, spurred by events that began with widespread arrests among Saudi Arabia’s elite.

The arrests raise “the spectre of instability in the kingdom”, said John Kilduff, a partner at Again Capital, a New York-based hedge fund.

“It’s another round of jaw-boning here to get this nervous market higher.”

Futures surged 3 percent in New York to levels last seen in July 2015. Dozens of princes, government ministers and billionaires were arrested in a sweeping anti-corruption probe, including high-ranking officials involved with state oil producer Saudi Aramco.

Though the shake-up involving the world’s biggest crude exporter underpinned crude’s rally, a promise by Nigeria’s oil minister to cap production joined with the dollar’s drop added upward momentum.

The low point for oil prices in New York this year was $42.05 a barrel in June. Yesterday’s gain also kicked up company shares with the S&P 500 Energy Index advancing 1.8 percent.

Oil has risen for four weeks in New York on signs a global glut is shrinking in response to output caps implemented by Opec countries and allied producers including Russia. At the November 30 gathering, Saudi Arabia, Iraq and other major suppliers are expected to make the case for extending the limits beyond the March expiration. – Bloomberg