SINGAPORE: Oil prices surged Friday following the death of Saudi Arabia’s King Abdullah, with investors watching to see if his successor will maintain output in the face of a global supply glut that had sent crude to six-year lows.
US benchmark West Texas Intermediate (WTI) for March delivery soared as much as 3.1 percent in New York after the Saudi royal court announced the death.
Oil prices have more than halved since the middle of last year, dragged down by an oversupply of crude in the face of weak global demand.
Saudi Arabia, the world’s top oil exporter, added to the slide when it led a decision by the Organization of the Petroleum Exporting Countries (OPEC) to keep the cartel’s production quota unchanged at a meeting in November.
In afternoon Asian trade on Friday, WTI for March delivery was up 90 cents, or 1.94 percent, at $47.21 a barrel. Brent crude for March jumped $1.03, or 2.06 percent, to $49.55.
“As we are uncertain of how the new king would react to the current supply glut, we believe that the market is pricing in this uncertainty causing prices to spike,” Daniel Ang, an investment analyst with Phillip Futures in Singapore, said in a market commentary.