The price of crude oil reached a two-year maximum earlier today, thanks to news of political stabilization in Saudi Arabia.
The Brent crude was trading at $62.90 this morning, the highest level in more than two years. The American WTI was also up at $56.
The prince of Saudi Arabia, Mohammed bin Salman, conducted a large-scale anti-corruption sweep and ordered the arrest of many high-profile individuals from the Saudi aristocracy and political elite. This strengthened the prince’s rule and will likely support the current policy on oil extraction and exports championed by the Saudis and the rest of OPEC. Prince bin Salman is an avid supporter of the agreement to reduce the supply of oil until the market is balanced, even if that means continuing the production cuts into 2018.
Even the United States, which used to counter OPEC’s efforts, have now reduced the number of active oil rigs and are also helping the market to stabilize. This is why we expect steady growth for oil prices.
