While the rest of the market was stuck in sideways action, energy sector-related exchange traded funds led the charge Monday on rising oil prices in response to Saudi Arabia energy minister's confirmation that there will be no major change to the kingdom's oil policy. Until this trade war finds a resolution, prices will have a pretty limited space for growth, whatever OPEC+ decides to do.
The market also expects that he will do more than his predecessor Khalid al-Falih to try to raise oil prices ahead of the Saudi IPO, Mr.al-Falih's major failing was to not get oil to the price Prince Bin-Salman and his father the King wanted. -China trade war and increasing USA supplies.
"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 said the pillars of Saudi Arabia's policy would not change and a global deal to cut oil production by 1.2 million barrels per day would survive.More news: Mugabe's body heads back to divided Zimbabwe for burial
"The change at the helm of the Energy Ministry holds the potential to focus on further supporting oil prices, in line with budgetary or domestic purposes", Jean-Michael Sallba, Bank of America Merrill Lynch MENA economist/strategist, wrote from London.
The market was further pressured by the U.S. Energy Information Administration's (EIA) lowering of its spot crude oil price forecasts, said Bob Yawger, director of energy futures at Mizuho.
So, if Prince Abdulaziz bin Salman, the first member of a royal family to hold that role, wants to avoid the same fate as Khalid al-Falih, he better start calling Russian Federation with a plan to announce a bigger production cut on Thursday. USA crude inventories probably dropped for a fourth week through September 6, according to a Bloomberg survey before government data Wednesday.
Still, that's considerably below the $80-$85 a barrel that analysts say is needed to balance Saudi Arabia's budget.More news: Taylor Swift suspect charged in Trump golf course damage
Vision 2030, which the crown prince unveiled in April 2016, aims to develop public-service sectors such as health, education, infrastructure, recreation and tourism, and to steer the Saudi economy away from its dependence on oil and gas, which now accounts for about half of its gross domestic product.
The OPEC report noted the cartel increased output by 136,000 barrels per day to more than 29.7mbd, primarily due to increased production by Saudi Arabia, according to secondary sources.
"The new minister is highly experienced and knows his subject better than just about anyone in the country", said Joseph Kechichian, senior fellow at the King Faisal Center for Research and Islamic Studies in Riyadh.
The energy minister of non-OPEC Oman, Mohammed Bin Hamad Al-Rumhy, said Muscat would like to see oil at $70 a barrel.More news: Google 'Play Pass' Subscription Service For Apps, Games Is Coming Soon
Prince bin Salman is Crown Prince Mohammed bin Salman's older half-brother. According to a Bloomberg report, Saudi Aramco is now the world's most profitable company.