Published: Fri, September 13, 2019
Markets | By Otis Pena

Oil Climbs on Saudi Arabia Ministry Shuffle

Oil Climbs on Saudi Arabia Ministry Shuffle

New Saudi oil minister Prince Abdulaziz bin Salman said he intends to maintain production curbs as part of an agreement with the Organization of the Petroleum Exporting Countries, a statement that sent oil futures to their highest close since late July in NY trading. The surge in US shale production over the last five year has put Saudi Arabia and its allies on the back foot, forced to concede market share to shore up prices.

The Saudi economy has struggled with subdued growth since the slump in oil prices in 2015.

To keep oil prices from sliding even further, al-Falih led Saudi Arabia's curb on production in OPEC and the oil cartel's agreement with other major oil producers, like Russian Federation, to cut production in past years.

Jason Bordoff, a former Obama administration energy adviser, said that while Falih was "very highly regarded" by the oil industry, Prince Abdulaziz also has strong global relationships.

While Prince Mohammed's programme is ultimately created to wean Saudi Arabia's economy off its addiction to oil, in the short term he needs a higher oil price to finance his plans. -China trade war and increasing US supplies.

That came as a faltering global economy and a boom in USA shale oil threatened to create a global glut in supply.

Oil minister Dharmendra Pradhan on a three-nation visit courted the new Saudi Arabian minister in Jeddah.

Saudi Arabia's nuclear power programme will begin with two atomic reactors, Prince Abdulaziz bin Salman said, according to a Reuters report.

India vs Qatar: ‘Everyone played their hearts out’: Gurpreet Singh Sandhu
And it was no surprise that Qatar's first real chance came from a set-piece. "Of course, Qatar deserved more from the game". Historically, Qatar has been the dominant side, having won three out of four official matches played against India .

Still, that's considerably below the $80-$85 a barrel that analysts say is needed to balance Saudi Arabia's budget.

Despite now getting the top role overseeing Saudi Arabia's energy portfolio, Prince Abdulaziz is not known to be close to Prince Mohammed, the king's most powerful son and heir to the throne. This is driving prices higher this week because it indicates that he's willing to be proactive in supporting prices.

Opec oil output rose in August for the first month this year as higher supply from Iraq and Nigeria outweighed restraint by Saudi Arabia and losses caused by USA sanctions on Iran, a survey found.

Oil prices slipped on Tuesday, offsetting narrow gains in the previous session, as sluggish demand forecasts countered expectations that major producers would prop up oil prices by limiting crude oil output.

Iraq said ministers would on Thursday discuss whether there was a need for deeper cuts.

Shares of energy companies rose alongside oil futures after Saudi Arabia's latest pledge to cap production. He is "a bridge builder and an astute diplomat", Barkindo said. During the early years of his half-brother's ascendancy, Prince Abdulaziz was less involved in policy making and spent long stretches outside the kingdom.

Aramco and India's largest private sector corporate entity Reliance Industries Limited (RIL) have agreed to form a partnership where the Saudi company will invest in the Indian firm for 20 per cent stake in its oil-to-chemical business.

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