Economy

Oil hits 6-week high on hopes of extended OPEC output cuts

Oil hits 6-week high on hopes of extended OPEC output cuts

Saudi Arabia's new energy minister Prince Abdulaziz bin Salman has assured India that his country will remain a reliable supplier to the world's third-largest energy consumer and is committed to investing in the country. -China trade war dents the demand outlook.

Enter Al-Falih's deputy, an urbane OPEC veteran who'd worked with Iranian Oil Minister Bijan Zanganeh for decades.

In the last decade, Saudi Arabia's efforts to protect prices by limiting its output contributed to the first USA shale boom in 2012-14 and the second US shale boom in 2017/18.

Iran will not negotiate with the United States while sanctions on Tehran are still enforced by Washington, Rouhani told his French counterpart Emmanuel Macron in a phone call on Wednesday, Iranian state media reported.

Prince Abdulaziz, a long-time member of the Saudi delegation to the Organization of the Petroleum Exporting Countries (OPEC), said the pillars of Saudi Arabia's policy would not change and a global deal to cut oil production by 1.2 million barrels per day would be maintained.

"The shift at the Ministry of Energy's helm contains the ability to concentrate on further promoting oil prices in line with budgetary or national reasons", stated London economist/strategist Jean-Michael Sallba, Bank of America Merrill Lynch MENA.

"We are proceeding with it cautiously. we are experimenting with two nuclear reactors", Prince Abdulaziz bin Salman said, referring to a plan to issue a tender for the kingdom's first two nuclear power reactors.

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"Prince Abdulaziz made clear that "no radical" change in the Saudi oil policy is forthcoming", said Tamas Varga of oil brokerage PVM.

Saudi's estimated oil export earnings fell from more than $800 million per day in April 2014 to less than $300 million per day in February 2016 in the slump that followed the end of the first shale oil boom.

"The new minister is highly experienced and knows his subject better than just about anyone in the country", said Joseph Kechichian, senior fellow at the King Faisal Center for Research and Islamic Studies in Riyadh. UBS oil analyst Giovanni Staunovo said.

The appointment of Prince Abdulaziz bin Salman as the new energy minister mirrors the ascent of his half-brother Crown Prince Mohammed bin Salman, the de facto ruler.

The IPO is a centerpiece of Saudi Arabia's economic transformation drive to attract foreign investment and diversify away from oil. Opec's share of the cut, which now runs to March 2020, is 800,000 bpd, delivered by 11 members and exempting Iran, Libya and Venezuela. Defending oil prices, or at least working to keep them from plummeting, is a key task for Saudi Arabia's energy minister.

The number of rigs drilling for oil in the United States has fallen by 150 or 17% from its cyclical high in November 2018, according to oilfield services company Baker Hughes. His other son, Prince Mohammed bin Salman, controls the major levers of power and is heir to the Arab world's most powerful throne.