What Saudi Arabia's Energy Shake-Up Says About Its Oil Plans

United States Oil ends at a nearly 6-week high as new Saudi oil minister repeats commitment to production cuts

United States Oil ends at a nearly 6-week high as new Saudi oil minister repeats commitment to production cuts

The Thursday meeting of the Joint Ministerial Monitoring Committee of the OPEC+ alliance will be attended by Saudi Arabia's new oil minister, Prince Abdulaziz bin Salman.

His remarks suggest he will continue a similar policy to that of his predecessor, Khalid al-Falih, who led the deal to cut global production among major producers.

Experts tracking the development said that failure to conclude the Aramco IPO could have been one of the reasons why Khalid al-Falih was removed as the Energy Minister, a position he held since 2016.

In the last decade, Saudi Arabia's efforts to protect prices by limiting its output contributed to the first USA shale boom in 2012-14 and the second US shale boom in 2017/18.

"I think the market is now is driven by negative sentiments emanating from negative views, but I don't believe that demand has been impacted", he told reporters on the sidelines of the conference.

Prince Abdulaziz's appointment as Energy minister underscores the key challenges being faced by Saudi Arabia as the country is mired in uncertainty over the future prices of its crude and oil, as well as a sluggish shift to a more diversified global entity.

"The shift at the Ministry of Energy's helm contains the ability to concentrate on further promoting oil prices in line with budgetary or national reasons", stated London economist/strategist Jean-Michael Sallba, Bank of America Merrill Lynch MENA.

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Trade and geopolitical tensions are affecting the market more than demand and supply, Mazrouei said, but he was quick to rule out hasty steps influenced by the trade war between the United States and China.

Prince Abdulaziz was speaking in Abu Dhabi, the United Arab Emirates, at an energy conference ahead of a meeting later this week between OPEC member-states and other major oil producers like Russian Federation to review an agreement to cut production. US crude inventories probably dropped for a fourth week through September 6, according to a Bloomberg survey before government data Wednesday. While the Middle Eastern country is OPEC's second-largest producer, it's also consistently flouted its pledge to reduce output and has actually increased production since the latest round of curbs began in January.

All eyes are on the de-facto Opec leader, Saudi Arabia, as the country recently carried out a major reshuffling of executives in its oil industry.

Prince Abdulaziz bin Salman can be seen embracing his brother, Crown Prince Mohammed bin Salman, after giving his oath at the Red Sea port of Jedda.

The American Petroleum Institute is reporting weekly oil inventory estimates today and if it is in its now habitual surprising mode it could push prices further up. It signaled a possible rift with the crown prince over his management of various issues, including reportedly moving too slowly in advancing Prince Mohammed's plan to sell shares in the state-owned oil company Aramco.

Henderson says that includes megaprojects such as building a $500 billion futuristic city, called Neom, in a remote northwestern corner of Saudi Arabia.

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