Published: Fri, November 10, 2017
Research | By Raquel Erickson

Oil prices hit two-year high following Saudi corruption crackdown

Oil prices hit two-year high following Saudi corruption crackdown

Crude oil prices spiked as much as 3 percent early this week after the government in Riyadh rounded up a handful of ministers as part of a sweeping crackdown tacitly broadcast as a move against corruption.

January Brent fell 0.2% to $63.55.

Several traders said prices got a boost from unconfirmed rumors that Saudi King Salman would relinquish the throne to his son Crown Prince Mohammed Bin Salman.

The West Texas Intermediate for December delivery rose 1.71 US dollars to settle at 57.35 dollars a barrel on the New York Mercantile Exchange, while Brent crude for January delivery jumped 2.20 dollars to close at 64.27 dollars a barrel on the London ICE Futures Exchange.

Iran's light crude gained $1.32 to $57.45 per barrel while Iran Heavy, one of the country's main export grades, traded up 40 cents to $54.95 in the week to October 27, Shana reported on Tuesday, citing an Oil Ministry report.

global oil prices have been surging recently.

OPEC will discuss output at a meeting on November 30, and is expected to extend the limits beyond their expiry in March 2018.

"Saudi Arabia is really going all-in again against Iran and that is, for me, more the focus than the domestic issue", Petromatrix strategist Olivier Jakob said.

Analysts surveyed by The Wall Street Journal had predicted crude supplies would fall by 2.1 million barrels on the week.

Oil prices may be approaching the point at which shale oil producers in the United States kick into overdrive, undermining an approach by the Organization of Petroleum Exporting Countries to correct an oversupplied market with coordinated production cuts.

China's October oil imports fell to just 7.3 million bpd from a near record-high of about 9 million bpd in September, according to data from the General Administration of Customs.

Members of the Organization of Petroleum Exporting Countries, spearheaded by Saudi Arabia, and 11 non-OPEC producers including Russian Federation have agreed to remove 1.8 million barrels per day of oil from the market through March 2018. Last month, it expected a 680,000 bpd year-over-year increase to 9.92 million bpd.

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