Oil jumps as Saudi king's death feeds market uncertainty

[peterz365]

Oil jumps as Saudi king's death feeds market uncertainty

35 minutes ago

• 
• 
• 
• 

.
View photo

• 
  .

By Himanshu Ojha

Related Stories

1. Oil jumps as Saudi king's death feeds market uncertainty Reuters
2. New Saudi king seen holding line on OPEC policy to keep oil output highReuters
3. Death of Saudi king unsettles oil market, prices rise Associated Press
4. Oil Prices Probably Won't Keep Gains Made After Death of Saudi King Bloomberg
5. Oil surges after Saudi King's death AFP

LONDON (Reuters) - Oil prices rose on Friday after the death of Saudi Arabia's king added more uncertainty to an oil market that has more than halved over the last six months.

King Abdullah bin Abdulaziz died early on Friday and his brother Salman became king of the world's top oil exporter.

Salman named his half-brother Muqrin as heir and nephew Mohammed bin Nayef, 55, as Deputy Crown Prince, moving to forestall any succession crisis at a moment when Saudi Arabia faces unprecedented turmoil on its borders.

Saudi state television said King Salman intended to keep oil minister Ali al-Naimi in place, suggesting the country's oil policy would remain unchanged.

Harry Tchilinguirian, senior oil strategist at BNP Paribas, said he expected no change in Saudi oil policy.


"King Salman was already involved in policy making prior to the passing of the king," he said. "So from that perspective, if he helped set the agenda, he will maintain that agenda."

Brent crude futures (LCOc1) were trading at $49.42 a barrel by 1215 GMT, up 90 cents. U.S. WTI crude futures (CLc1) were at $46.60, up 29 cents.

After seeing strong volatility and price falls earlier in January, oil markets have moved little this week, with Brent prices range-bound between $47.78 and $50.45 a barrel.

The new Saudi king is expected to continue an OPEC policy of keeping oil output steady to protect the cartel's market share from rival producers.

Abdullah's death comes amid some of the biggest shifts in oil markets in decades. Oil prices have fallen by almost 60 percent since peaking last June as soaring supplies of shale oil from North America have clashed with cooling demand.

What the Saudi King's Death Means for Oil Poli …Play video

Booming U.S. production has turned the United States from the world's biggest oil importer into one of the top producers, pumping out over 9 million barrels per day.

Data from the Energy Information Administration on Thursday showed the biggest build in U.S. crude inventory in at least 14 years, driving Brent and WTI prices (CL-LCO1=R) apart. [EIA/S]

To combat soaring output and falling prices, many oil exporters, such as Venezuela, wanted the 12-member Organization of the Petroleum Exporting Countries (OPEC) to cut output in order to support prices and revenues.

Yet, led by Saudi Arabia, OPEC announced last November it would keep output steady at 30 million barrels per day.

 

[peterz365]

Oil Erases Gains as New Saudi King Says Policies Stable

Oil erased gains in New York following the death of King Abdullah of Saudi Arabia as his successor said policies won’t change in the world’s largest crude exporter.

West Texas Intermediate futures were little changed, having advanced 3.1 percent after the Saudi royal court announced the death in a statement. Brent remained 1.4 percent higher in London. King Salman bin Abdulaziz, who succeeds Abdullah on the throne, said he would maintain his predecessor’s policies. Oil Minister Ali Al-Naimi, who led OPEC’s November decision to defend market share against surging U.S. shale supplies, remains in his post, according to state-run Saudi Press Agency.

“Such news was always going to provoke a short-term recovery and the whole focus of the market is shifting back to this region,” Eugen Weinberg, Frankfurt-based head of commodities research at Commerzbank AG said by phone. “The new king will stick with the same oil policy - it doesn’t make sense to change it.”

Oil Prices

Oil has slumped 36 percent since the Organization of Petroleum Exporting Countries’ Nov. 27 accord to maintain production at 30 million barrels a day amid a glut caused in part by the fastest U.S. output in three decades. Saudi Arabia’s oil strategy is likely to remain unchanged as King Salman assumes power, Fatih Birol, chief economist at the International Energy Agency, said at theWorld Economic Forum in Davos, Switzerland.

WTI for March delivery gained as much as $1.45 to $47.76 a barrel in electronic trading on the New York Mercantile Exchange, trading for $46.23 at 1:02 p.m. London time. Total volume was about 35 percent above the 100-day average for the time of day. Prices have lost 4.9 percent this week.

Smooth Transition
Brent crude for March settlement advanced as much as $1.28 to $49.80 a barrel on the ICE Futures Europe exchange before paring to $49.25 a barrel. The grade has lost 1.9 percent this week. Brent, used to price more than half the world’s oil, traded at a premium of $2.97 to WTI, compared with $1.04 on Jan. 16.

“It was expected the oil market would react nervously to the king’s death,” said Giovanni Staunovo, an analyst at UBS AG in Zurich. “But it’s likely to be a short-term reaction as the majority of market participants don’t expect a change in Saudi policy. Since the bounce, prices have drifted lower again.”

Saudi Arabia’s current oil strategy of maintaining output levels will remain unchanged, said Commerzbank AG, BNP Paribas SA and Bank of America Corp.

“There is no tangible evidence to to suggest that Saudi Arabia will veer away from its existing policy of keeping oil output steady in the face of growing U.S. shale oil supply, with a view to crowding out the marginal higher-cost producers within non-OPEC,” Harry Tchilinguirian, head of commodity markets strategy at BNP in London, said by e-mail.

Ministerial Appointments
King Abdullah oversaw a fivefold expansion in the size of the Arab world’s biggest economy and met the Arab Spring with a mixture of force and largesse. He died after almost a decade on the throne. He was born in 1924.

The royal court said Salman, 79, was named king and Prince Muqrin, 69, another half-brother, has been chosen as Crown Prince. Salman appointed Prince Mohammed bin Nayef, the country’s Interior Minister, as deputy crown prince and his son Mohammed bin Salman as defense minister, Saudi State Television reported.

Oil Minister Al-Naimi, who has driven decision-making at the ministry since 1995 and turns 80 this year, has said he’d like to devote more time to his other job, chairman of the science and technology university named after the late sovereign.

“Any change in the minister now can create a lot of uncertainty in the market, which Saudi Arabia is going to try and avoid,” Amrita Sen, chief analyst at London-based consultants Energy Aspects Ltd. said by phone. “We do think there’s going to be a change, but not straight away.”

 

[cucapila]

你说明天他要是诈尸了这油价得降多少啊？

 

[未落网的情]

都埋了，不会诈尸了

 

[冷笑9声]

45.6X， 这价老向大叔也笑不起来啊？

 

[InterMilan7]

这老哥当年汶川地震时可捐了不少钱啊。好像是中国接受过的最大一笔。