Singapore — Crude oil prices rose during mid-afternoon trade in Asia Friday, amid uncertainty over whether Saudi King Abdullah's death would lead to a change in the kingdom's oil policy.
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At 3:55 pm in Singapore (0755 GMT), ICE March Brent rose 93 cents/barrel (1.92%) from Thursday's settle to $49.45/b, while the NYMEX March crude contract rose 79 cents/b (1.71%) to $47.10/b.
King Abdullah died after midnight at the age of 90 on Friday, AP reported. He was succeeded by his 79-year-old half-brother, Crown Prince Salman.
"The Saudi king's death is [bringing] uncertainty [to] the crude market. Whether they maintain their oil policy is now in question," said Barnabas Gan, economist at OCBC Bank.
Nobuo Tanaka, former executive director of the International Energy Agency, said in an emailed comment to Platts that Saudi Arabia would "likely keep its current [oil] policy for the time being, but I cannot foresee the future."
One concern is whether the new king will decide to replace oil minister Ali al-Naimi, "which could mean a change in Saudi and OPEC oil policy," said Avtar Sandhu, senior commodities manager at Phillip Futures.
Market observers said that the day's rises would likely be short-lived, given the ongoing fundamental weakness in the markets and that there were no indications of an impending, dramatic shift in Saudi oil policy.
"The reaction today is a function of the added geopolitical uncertainty, as the newly-anointed king may very well bring fresh ideas," said David Lennox resource analyst at Fat Prophets.
"We however believe that it'll be 'business as usual,' as the markets would have jumped even higher if there was anything suggesting that the new king of one of the world's largest crude exporters is a hawk," he added.
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