Oil prices climb on Canada fires, new Saudi minister

9th May 2016, Comments 0 comments

Crude prices extended gains on Monday as raging wildfires hit production in Canada, while traders digested also the surprise news that Saudi Arabia had replaced its long-standing oil minister.

Around 1100 GMT, US benchmark West Texas Intermediate for delivery in June was up 78 cents at $45.44 a barrel.

Brent North Sea crude for July rose 46 cents to $45.83 a barrel compared with Friday's close.

Saudi Arabia, the biggest exporter in the OPEC producers' group, announced at the weekend that it had replaced oil minister Ali al-Naimi after two decades in the post.

He has been replaced by Khaled al-Falih, the longtime head of state oil giant Saudi Aramco and an ally of Prince Mohammed bin Salman, who has taken charge of economic policy and has embarked on a drive to transform the economy to reduce its dependence on oil.

"The appointment of a new minister shows that the Saudis are trying to rejuvenate the market and are serious about trying to reduce production," said Alex Wijaya, a senior trader at CMC Markets.

"So there's a lot of positive outlook in the markets," Wijaya told AFP.

Naimi, the most powerful figure within the OPEC oil cartel, had seen his influence curbed by the growing power of Prince Mohammed, as the oil market faces a supply glut that has weighed heavily on prices since 2014.

Oil market focus was also on the raging wildfires in Canada's Alberta region, which have forced producers to slash crude production.

Monday's price rises were tempered however by data showing another fall in Chinese exports and imports last month, in the latest sign of weakness in the world's second largest economy and top energy consumer.

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© 2016 AFP

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