Oil prices hit their highest since July 2015 yesterday as Saudi Arabia’s crown prince cemented his power over the weekend through an anti-corruption crackdown, while markets continued to tighten.
Brent crude futures were trading 26 cents higher at $62.33 a barrel. U.S. West Texas Intermediate (WTI) crude rose 25 cents to $55.89 a barrel, breaking above $56 for the first time since July 2015.
Saudi Crown Prince Mohammed bin Salman tightened his grip with the arrest of royals, ministers and investors, including prominent billionaire Alwaleed bin Talal and the powerful head of the National Guard, Prince Miteb bin Abdullah.
Analysts for now do not see Saudi Arabia, the world’s largest oil exporter, changing its policy of boosting crude prices.
Prince Mohammed’s reforms include a plan to list parts of state-owned oil company Saudi Aramco next year, and a higher oil price is seen as beneficial for its market capitalisation.
“We believe the kingdom will stick to the OPEC deal and continue to focus on reducing global oil inventories,” UBS oil analyst Giovanni Staunovo said.
Saudi Energy Minister Khalid al-Falih said while there is “satisfaction” with a production-cutting deal between the OPEC and other producers led by Russia, the “job is not done yet”.