Oil prices fall on market relief over Saudi policy
Oil prices declined on Monday, with U.S. crude falling close to a nearly six-year low, as Saudi Arabia's new King Salman moved to assuage fears of an unstable transition and any policy change in the world's largest oil exporter.
Salman was quick to retain veteran Saudi oil minister Ali al-Naimi on Friday, in a message aimed at calming a jittery energy market following the death of King Abdullah last week.
"Oil markets will take comfort from the speed and stability of the succession process, and the announced pledge for continuity of policy," said Majid Jafar, chief executive of Crescent Petroleum, a UAE-headquartered oil and gas producer focussed on the Middle East.
March Brent crude LCOc1 was trading down 86 cents at $47.93 a barrel by 0932 GMT, wiping out light gains made on Friday, but off an early low of $47.57.
West Texas Intermediate (WTI) crude for March delivery CLc1 was at $44.97 a barrel, down 62 cents. Front-month WTI earlier touched an intraday low of $44.35, just above the $44.20 hit on Jan. 13, which was the lowest since April 2009.
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Brent may revisit its Jan. 13 low of $45.19 per barrel over the next four weeks, Reuters market analyst Wang Tao said.
Brent's premium to WTI CL-LCO1=R widened to more than $3 after U.S. crude stockpiles rose by the highest amount in over two decades. [EIA/S]
"Oil markets decoupled as WTI sank," Stephen Schork, editor of the Pennsylvania-based Schork Report, said in a note. "As of Friday we have switched our daily bias to bearish in WTI."
Money managers cut their net long U.S. crude futures and options positions in the week to Jan. 20, the U.S. Commodity Futures Trading Commission said on Friday.
In the United States, the East Coast from Philadelphia to New York City to Maine was bracing for a potentially historic blizzard on Monday.
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