Oil Prices Hit Two-year High Following Saudi Corruption Crackdown

Oil rigs in the US cut to 729

Oil rigs in the US cut to 729

Oil prices climbed to their highest level in two years after Saudi Arabia's Crown Prince issued an anti-corruption order, which resulted in the arrests of princes, senior officials and businessman.

The price of Brent Crude rose 3.5% to $64.3 a barrel by the end of yesterday's trading, while West Texas Intermediate (WTI) rose 3% to $57.4 a barrel, both their highest levels since July 2015.

According to the FT, targets of Crown Prince Mohammed bin Salman's anti-corruption commission, led by his son of the same name, included one of the world's richest men Prince Alwaleed bin Talan and head of the National Guard Prince Miteb bin Abdullah.

Oil prices have been on the rise ever since the Oil of the Petroleum Exporting Countries (OPEC) announced it has plans to extend its 1.8 million barrels per day (BPD) cap to the end of 2018, a deal which could be finalised between de facto leader Saudi Arabia and Russia in Vienna on 30 November.

However, Saudi energy minister Khalid al-Falih said there was "satisfaction" with the deal, but the "job [was] not done yet", according to Reuters.

Furthermore, US energy companies cut eight oil rigs last week to 729, the biggest fall since May 2016, meaning oil prices have risen over 40% since June.

Oil, gold, agriculture: Where next for commodities?

Brent Crude has been trading above the $59 a barrel mark ever since Turkish President Recep Erdogan threatened to cut off the northern Iraqi pipeline in September due to a Kurdish independence referendum, something he is strongly against.

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