Oil rises as new Saudi minister signals OPEC+ cuts to continue

Oil rose for a fourth day after Saudi Arabia’s new energy minister signaled that OPEC and its allies will continue with production cuts as the group prepared to gather in Abu Dhabi.

Futures added 0.9 per cent after climbing 2.6 per cent last week.

Prince Abdulaziz bin Salman, appointed at the weekend after Saudi King Salman dismissed Khalid Al-Falih, said there will be no radical change in the policy of OPEC+, which has cut crude production this year to prevent a glut and shore up prices.

The United Arab Emirates energy minister promised a push to get all members committed to curbs, but said there’s no recommendation to make deeper reductions.

Oil capped a second weekly gain on Friday following a decline in U.S. crude stockpiles and efforts from Federal Reserve chairman Jerome Powell to calm fears of a possible recession.

Prices were further supported Monday by Prince Abdulaziz’s remarks, while a Russian official said his country intends to maintain its critical alliance with Saudi Arabia following the appointment.

“Prince Abdulaziz is very experienced and has served in the energy industry for decades,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “His comments today suggest we shouldn’t expect any major policy changes from the kingdom, which still wants to see oil inventories falling.”

Brent for November rose 48 cents to $62.02 a barrel on the ICE Futures Europe Exchange, and traded at a $5.10 premium to WTI for the same month.

The global benchmark crude capped a fourth weekly gain on Friday.

Prince Abdulaziz served as deputy petroleum minister for a dozen years and most recently as minister of state for energy since 2017. He takes charge as the Organization of Petroleum Exporting Countries and its allies, most notably Russia, work to bolster prices at a time when a raging trade war between the U.S. and China weighs on global demand.

The prince said that the trade war has put a “fog” around the oil market, but added that he isn’t too concerned about U.S. shale output.

Read: Saudi has a new energy minister: What does it mean for the oil industry?