Oil
prices fall on market relief over Saudi policy
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[January 26, 2015]
By Himanshu Ojha
LONDON (Reuters) - Oil prices fell on
Monday, with U.S. crude falling close to a nearly six-year low, as Saudi
Arabia's new King Salman moved to assuage fears of an unstable
transition and any policy change in the world's largest oil exporter.
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Salman was quick to retain veteran Saudi oil minister Ali al-Naimi
on Friday, in a message aimed at calming a jittery energy market
following the death of King Abdullah last week.
March Brent crude <LCOc1> was trading down 63 cents at $48.16 per
barrel by 1106 GMT, wiping out modest gains made on Friday but off
an early low of $47.57.
West Texas Intermediate (WTI) crude for March delivery <CLc1> was at
$45.10 a barrel, down 49 cents. Front-month WTI touched an intraday
low of $44.35, just above the $44.20 hit on Jan. 13, which was its
lowest level since April 2009.
Saudi Arabia, the world's top oil exporter, led the 12-member
Organization of the Petroleum Exporting Countries (OPEC) last
November in a decision to keep oil production steady at 30 million
barrels per day. This has added to a global supply glut that has
more than halved prices since June.
![](http://archives.lincolndailynews.com/2015/Jan/26/images/ads/current/humanesociety_sda022411.png) "Oil markets will take comfort from the speed and stability of the
succession process, and the announced pledge for continuity of
policy," said Majid Jafar, chief executive of Crescent Petroleum, a
UAE-headquartered oil and gas producer focussed on the Middle East.
In Greece, the left-wing Syriza won a decisive victory against the
ruling conservatives in Sunday's election, setting up a possible
confrontation with international creditors
Brent's premium to WTI <CL-LCO1=R> saw an intraday high of $3.59,
its highest since January 5, after U.S. crude stockpiles rose by the
highest amount in over two decades. [EIA/S]
Money managers cut their net long U.S. crude futures and options
positions in the week to Jan. 20, the U.S. Commodity Futures Trading
Commission said on Friday.
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Oil services firm Baker Hughes <BHI.N> published data on Friday that
showed the number of U.S. oil rigs fell for a seventh straight week
to 1,317, the fewest since January 2013.
Germany-based Commerzbank said that output would remain high in the
short term but U.S. oil rigs would continue to dwindle in the coming
weeks, eventually supporting prices.
"It is only a question of time before this is reflected in decreased
oil production," Commerzbank analysts said in a note to clients on
Monday.
"In our opinion, this indicates that prices will recover in the
second half of the year."
(Additional reporting by Florence Tan in Singapore; Editing by Dale
Hudson and Jason Neely)
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