Investing.com - Oil prices climbed on Monday after Saudi Arabia’s King Salman replaced the country’s energy minister with one of his own sons, in a move seen strengthening a deal between OPEC and its allies to reduce output.
Prince Abdulaziz bin Salman, son of Saudi King Salman and a long-time member of the Saudi delegation to the Organization of the Petroleum Exporting Countries, took over from Khalid al-Falih on Sunday.
Global benchmark Brent crude futures were up 34 cents at $61.88 a barrel by 08:30 AM ET (12:30 GMT) while U.S. WTI crude was up 43 cents at $56.95 a barrel.
The prince had helped negotiate the current agreement between the Organization of the Petroleum Exporting Countries and non OPEC countries, including Russia, a group known as OPEC+, to cut global crude supply in order to support prices and balance the market.
Speaking on Monday, Prince Abdulaziz said the pillars of Saudi policy would not change and that the OPEC+ deal would survive.
"The options for a change of policy are relatively limited," said Olivier Jakob, analyst at Petromatrix. "The price reaction is muted because we don't expect a strong change."
Russia's oil output in August exceeded its quota under the OPEC+ agreements to cut 1.2 million barrels per day.
OPEC oil output rose in August, gaining for the first month this year as higher supply from Iraq and Nigeria outweighed restraint by Saudi Arabia and losses caused by U.S. sanctions on Iran, a Reuters survey found.
On Sunday the United Arab Emirates' energy minister, Suhail bin Mohammed al-Mazroui, said OPEC and non-OPEC producers were "committed" to achieving oil market balance and that Abu Dhabi would support any consensus decision on further production cuts.
The OPEC+ joint ministerial monitoring committee, known as JMMC, will meet on Thursday in Abu Dhabi on the sidelines of the energy conference.
Prices on Monday were also supported by a rise in oil imports in China in August, with shipments to the world's biggest importer up 3% from July and nearly 10% higher in the first eight months of 2019 from a year earlier.
In the United States, drilling companies cut the number of operating oil rigs for a third week in a row last week.
--Reuters contributed to this report