Oil rises after Prince Abdulaziz bin Salman named Saudi energy minister
Abdulaziz says the pillars of Saudi Arabian policy will not change and the Opec+ deal will survive
London — Oil prices rose on Monday after Saudi Arabia, the world's largest exporter of crude, named oil veteran Prince Abdulaziz bin Salman as its new energy minister, a move seen strengthening an output-cutting deal between Opec and other producers.
Abdulaziz, son of Saudi king Salman and a long-time member of the Saudi delegation to the oil cartel, replaced Khalid al-Falih on Sunday.
Global benchmark Brent crude futures were up 35 US cents at $61.89 a barrel by 8.46am GMT, while U.S. West Texas Intermediate was up 31 cents at $56.83 a barrel.
Abdulaziz helped to negotiate the current agreement on supply cuts between Opec and non-Opec countries including Russia, a group known as Opec+ and has been instrumental in cementing that co-operation, Opec sources said.
Speaking on Monday, Abdulaziz said the pillars of Saudi policy would not change and that the Opec+ deal would survive.
“The options for a change of policy are relatively limited,” said Olivier Jakob, analyst at Petromatrix. “The price reaction is muted because we don't expect a strong change.”
Russia's oil output in August exceeded its quota under the Opec+ agreements to cut 1.2-million barrels per day.
Opec oil output rose in August, gaining for the first month in 2019 as higher supply from Iraq and Nigeria outweighed restraint by Saudi Arabia and losses caused by US sanctions on Iran, a Reuters survey found.
The United Arab Emirates' energy minister, Suhail al-Mazrouei, said on Sunday that members of Opec and non-Opec producers were “committed” to achieving oil market balance.
Prices climbed for a fourth day running on Monday, also supported by comments from Mazrouei that Opec and its allies were committed to balancing the crude market.
The Opec+ deal's joint ministerial monitoring committee will meet on Thursday in Abu Dhabi.
Trade and geopolitical tension is affecting the market more than demand and supply, Mazrouei said, but he was quick to rule out hasty steps influenced by the trade war between the US and China.
“The fear of slower [oil] demand is only going to happen if that tension is escalating and I am personally hopeful that is not the case,” Mazrouei said.
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 3% from July and nearly 10% higher in the first eight months of 2019 from a year earlier.
In the US, drilling companies cut the number of operating oil rigs for a third week in a row last week.