Crude Oil Price Rebounds to $62 as New Saudi Minister Commits to Output Cuts


Ejiofor Alike with agency reports

Oil prices rose more than two per cent yesterday after the new Saudi Energy Minister, Prince Abdulaziz bin Salman, confirmed expectations that he would stick with his country’s policy of limiting crude output to support prices.

Prince Abdulaziz, son of Saudi King Salman and a long-time member of the Saudi delegation to the Organisation of the Petroleum Exporting Countries (OPEC), replaced Khalid al-Falih on Sunday.

Prince Abdulaziz bin Salman, according to an analyst quoted by Reuters, is known as an oil production cutter, who “has been instrumental in securing production cuts in the past.”

Brent crude futures gained $1.32, or 2.1 per cent, to $62.86 a barrel, while U.S. West Texas Intermediate (WTI) crude futures rose $1.44, or 2.6 per cent, to $57.96 a barrel.

Prince Abdulaziz said the pillars of Saudi Arabia’s policy would not change and a global deal to cut oil production by 1.2 million barrels per day would survive.

He added that the so-called OPEC+ alliance between OPEC and non-member countries, including Russia was staying for the long term.

Russia’s oil output in August exceeded its quota under the OPEC+ agreements.

OPEC oil output in August rose for the first month this year as higher supply from Iraq and Nigeria outweighed restraint by Saudi Arabia and losses caused by U.S. sanctions on Iran.

On Sunday, the United Arab Emirates’ Energy Minister, Suhail al-Mazrouei, said OPEC and non-OPEC producers were “committed” to achieving oil market balance.

The OPEC+ deal’s joint ministerial monitoring committee meets on Thursday in Abu Dhabi.

Trade and geopolitical tensions are affecting the market, Mazrouei said.

Meanwhile, OPEC’s Joint Ministerial Monitoring Committee (JMMC) may discuss new metrics for the global oil cuts deal when it convenes in Abu-Dhabi on September 12, TASS cited OPEC Secretary-General Mohammad Barkindo as saying yesterday.

“This is not on the agenda, but we can discuss it as we will discuss the market situation,” TASS quoted Barkindo as saying about the targets.