Oil fell to the lowest in almost six years on speculation the death of King Abdullah of Saudi Arabia won’t signal any change in strategy for the world’s largest crude exporter, Bloomberg reported.
US benchmark oil futures slid 1.6 percent, reversing an initial gain of as much as 3.1 percent. Salman Bin Abdulaziz Al Saud, who succeeds Abdullah on the throne, said he would maintain his predecessor’s policies. The kingdom will not cut production to boost prices because other producers would fill in the gap, Saudi Prince Alwaleed Bin Talal Al Saud said.
Oil has slumped about 36 percent since the Organization of Petroleum Exporting Countries’ Nov. 27 accord to maintain production at 30 million barrels a day amid a glut caused in part by the fastest US output in three decades.
Saudi Arabia’s oil strategy is likely to remain unchanged as King Salman assumes power, Fatih Birol, chief economist at the International Energy Agency, said at the World Economic Forum in Davos, Switzerland.
West Texas Intermediate crude for March delivery fell 72 cents to end at $45.59 a barrel on the New York Mercantile Exchange, the lowest settlement since March 11, 2009. Futures fell 6.4 percent this week. The volume of all futures was about 13 percent above the 100-day average. Brent crude for March settlement advanced 27 cents, or 0.6 percent, to $48.79 a barrel on the ICE Futures Europe exchange after climbing to $49.80. Volume was 2 percent above the 100-day average. Brent, used to price more than half the world’s oil, ended at a premium of $3.20 to WTI on the ICE, compared with $1.04 on Jan. 16.
Saudi Oil Minister Ali Al-Naimi, who led OPEC’s November decision to defend market share against surging US shale supplies, remains in his post, according to state-run Saudi Press Agency. Saudi Arabia’s stance of maintaining output levels will remain unchanged, said Commerzbank AG, BNP Paribas SA and Bank of America Corp.
King Abdullah oversaw a fivefold expansion in the size of the Arab world’s biggest economy and met the Arab Spring with a mixture of force and largesse. He died after almost a decade on the throne. He was born in 1924.
Saudi Oil Minister Al-Naimi, who has driven decision-making at the ministry since 1995 and turns 80 this year, has said he’d like to devote more time to his other job, chairman of the science and technology university named after the late sovereign.
