Oil hits two-year high on tightening markets, Saudi purge

Oil prices peaked to their highest levels since July 2015, touching $62.44 barrel per day (bbl) on Monday amid tighter markets and Saudi Arabia’s anti-corruption purge.

The rise represents a surge of almost 40 percent compared to June 2017 lows.

“There’s no doubt that OPEC and Co. have been a major influencer of the most recent rally, but oil traders have a new political risk to consider, in the coming days and weeks,” said Hussein Sayed, Chief Market Strategist at FXTM.

“The anti-corruption crackdown in Saudi Arabia resulting in the arrest of 11 princes, and dozens of senior officials, led many traders to question how oil prices will be affected,” he added.

U.S. West Texas Intermediate (WTI) crude added 0.38 percent to $55.85 bbl.

The rise in oil prices will remain supported by strong fundamentals, as OPEC’s strategy is unlikely to change, and the output cut deal will be extended in the oil cartel’s upcoming meeting in Vienna on Nov. 30, Sayed said.

Oil prices are currently approaching the higher end of the trading range for the rest of the year, and will be looking for a mean reversion towards or below $60 bbl in the coming weeks, he added.

Saudi Arabia on Saturday arrested 11 princes including billionaire Prince Alwaleed bin Talal, as well as several former and current ministers and prominent businessmen, on corruption charges.

The arrests came after the Kingdom on Saturday announced the formation of a new anti-corruption committee, to be headed by Crown Prince Mohammed bin Salman.