Saudi King Abdullah Dies, Oil Prices Rebound

World | January 23, 2015, Friday // 10:16
Bulgaria: Saudi King Abdullah Dies, Oil Prices Rebound A file photo dated 11 December 2013 shows then Saudi Crown Prince Salman bin Abdulaziz listening to the closing statement at the Gulf Cooperation Council summit meeting in Kuwait City, Kuwait. Photo EPA/BGNES

Saudi King Abdullah bin Abdulaziz has died at the age of about 90, international news outlets reported on Friday.

The news prompted a rise in oil prices amid questions as to whether the king’s death could lead to a change in the oil policy of Saudi Arabia. The kingdom is widely seen as the leader of the Organisation of the Petroleum Exporting Countries (OPEC) and has a large influence on energy prices and political stability in the Middle East.

Benchmark Brent crude for March delivery rose 84 cents to USD 49.36 a barrel on London’s ICE Futures exchange, while on the New York Mercantile Exchange West Texas Intermediate (WTI) crude futures for delivery in March traded at USD 47.10 a barrel, up 79 cents in midmorning trade on the Globex electronic session.

According to a statement from the Saudi royal court, Abdullah’s half-brother, Crown Prince Salman bin Abdulaziz,79, was declared king and Prince Muqrin, 69, became crown prince.

King Abdullah’s death is not expected to change the downward course of oil prices over the next several months, according to analysts. The newly proclaimed king has explicitly backed the current stance of Saudi Arabia, the world’s largest oil exporter.

The kingdom has been keeping oil output high even as the rest of the world is oversupplied with crude, which has led to a slump of nearly 60% in oil prices since June 2014.

But those low prices are also putting pressure on Saudi Arabia's budget and have drawn criticism from some members of the royal family. Saudi Arabia depends heavily on oil revenues to finance its government. According to Oxford Economies estimates the kingdom will have negative economic output in 2015 if oil continues to stay at or below USD 50 a barrel.

“Commodity markets might have a knee-jerk reaction but it will soon settle down,” according to Larry Goldstein, a veteran oil adviser at the US-based Energy Policy Research Foundation, quoted by the AP.

Simon Powell, head of Asia oil and gas at brokerage firm CLSA, also believes King Salman bin Abdulaziz will maintain his predecessor’s policy.

“The new King has been part of the ruling elite of princes for decades and he’s likely to continue the main thrust of Saudi policy,” said Powell, quoted by the Wall Street Journal.

Saudi Arabia has 16% of the world’s known oil reserves, according to the US Energy Information Administration.

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!

World » Be a reporter: Write and send your article
Tags: Saudi Arabia, oil, oil prices, crude, brent, WTI, King Abdullah, King Salman

Advertisement
Advertisement
Bulgaria news Novinite.com (Sofia News Agency - www.sofianewsagency.com) is unique with being a real time news provider in English that informs its readers about the latest Bulgarian news. The editorial staff also publishes a daily online newspaper "Sofia Morning News." Novinite.com (Sofia News Agency - www.sofianewsagency.com) and Sofia Morning News publish the latest economic, political and cultural news that take place in Bulgaria. Foreign media analysis on Bulgaria and World News in Brief are also part of the web site and the online newspaper. News Bulgaria