Oil is heading for a fifth weekly advance as political upheaval in the world’s biggest crude exporter countered an expansion of U.S. output to the highest level in more than three decades.
Futures were little changed in New York, up 2.6 percent for the week. Arrests on the weekend of senior Saudi Arabian officials in an anti-corruption probe is seen as consolidating power for Crown Prince Mohammed bin Salman, who supports extending OPEC-led output cuts. While prices eased during the week, record weekly U.S. oil production and a surprise increase in crude stockpiles weren’t enough to peg back Monday’s 3.1 percent surge.
Oil is heading for the longest run of weekly gains since October 2016 as global supplies tighten and on signs the Organization of Petroleum Exporting Countries will extend output curbs past the end of March. OPEC this week said U.S. shale production will grow considerably faster than expected over the next four years after cuts triggered a price recovery.
“Political stability was jolted awake this week after Saudi Arabia launched an anti-corruption probe,” Daniel Hynes, a Sydney-based analyst at Australia & New Zealand Banking Group Ltd., said in a note. “While the likelihood of a disruption to supply remains low, we believe the events raise the probability of Saudi Arabia taking a more aggressive stance on production curbs. The risks now lie towards curbs remaining in place longer than expected.”
West Texas Intermediate for December delivery was at $57.05 a barrel on the New York Mercantile Exchange, down 12 cents, at 7 a.m. in London. Total volume traded was about 49 percent below the 100-day average. Prices added 36 cents to $57.17 on Thursday.
Brent for January settlement lost 18 cents to $63.75 a barrel on the London-based ICE Futures Europe exchange. Prices are up 2.8 percent this week, set for a fifth weekly gain. The global benchmark crude was at a premium of $6.48 to January WTI.
Saudi Arabia said it plans to cut crude exports to all the regions it ships to next month. Shipments will fall by 120,000 barrels a day in December from November, a spokesman for the Energy Ministry said, without specifying what those levels would be. Bloomberg calculations from vessel-tracking data estimated flows in October at 6.989 million a day.
An international rush is on for Mexico’s offshore oil riches led by Exxon Mobil Corp. and Royal Dutch Shell Plc. Companies are lining up to bid in the country’s Jan. 31 deep-water auction.