Light, sweet crude oil prices soared by more than $1.70 on Nov. 6 on the New York market while Brent crude oil prices jumped by more than $2 in London. The oil benchmarks reached 2-year highs although they were edging down in Nov. 7 trading.
The gains came on news that Saudi Arabia’s Crown Prince Mohammed bin Salman launched a broad crackdown on what he called corruption, resulting in 11 princes, several ministers, and some businessmen being arrested.
Analysts said Prince Mohammed’s move against royals and other Saudi elite, which started during the weekend, provided another geopolitical risk for the oil market to consider.
Market participants already are watching conflict in Iraq with Kurdistan, US President Donald Trump’s discontentment with Iran over an international nuclear agreement that resulted in the lifting of oil sanctions, and Venezuela’s struggle with its debt situation.
Helima Croft, RBC Capital Markets global head of commodity strategy, called the political development in Saudi Arabia “a shot across the bow at the old establishment.”
Croft said she does not expect a change in Saudi oil policy.
The Saudis have led efforts in the Organization of Petroleum Exporting Countries to organize production-cut targets among major producers in efforts to reduce world oil inventories and boost prices.
Energy prices
The December light, sweet crude contract on the New York Mercantile Exchange increased $1.71 to $57.35/bbl on Nov. 6. The January 2018 contract rose $1.71 to $57.57/bbl.
The NYMEX natural gas price for December climbed nearly 15¢ to $2.13/MMbtu. The Henry Hub cash gas price for Nov. 6 was $3.03/MMbtu, up 29¢.
Heating oil for December rose nearly 6¢ to $1.94/gal. The NYMEX reformulated gasoline blendstock for December climbed 3.6¢ to $1.83/gal.
The Brent crude contract for January 2018 on London’s ICE gained $2.20 to $64.27/bbl. The February 2018 contract increased $2.16 to $63.96/bbl. The gas oil contract for November was up $15.25 to $565.50/tonne.
OPEC’s Nov. 6 basket of crudes price was up $1.90 to $61.05/bbl.
Contact Paula Dittrick at [email protected].
