TheCable

Oil prices hit their highest levels early on Monday as markets tightened, while Saudi Arabia’s crown prince cemented his power over the weekend through an anti-corruption crackdown that included high profile arrests.

Brent crude, the international benchmark for oil prices, hit $62.44 per barrel on Monday — highest level since June 2015.

US West Texas Intermediate crude hit $56.00 per barrel in early trading, also the highest for many months now.

Mohammed bin Salman, Saudi Arabia’s designated future king, has tightened his grip on power through an anti-corruption purge by arresting royals, ministers and investors.

The arrest includes Alwaleed bin Talal, prominent business billionaire, and Miteb bin Abdullah, head of the National Guard.

“This consolidates the reforming process underway, part of which is a desire to drive the price of oil higher,” said Greg McKenna, chief market strategist at futures brokerage, AxiTrader.

Bin Salman’s reforms include a plan to list parts of giant state-owned oil company Saudi Aramco next year; a higher oil price is seen as beneficial for the market capitalisation of the future listed company.

In oil fundamentals, traders said that there were ongoing signs of tightening market conditions.

US energy companies cut eight oil rigs last week, to 729, in the biggest reduction since May 2016.

The decline in US drilling activity comes as the Organisation of Petroleum Exporting Countries and non-OPEC group led by Russia have pledged to hold back about 1.8 million barrels per day.

The pact to withhold supplies runs to March 2018, but there is growing consensus to extend the deal.