Risk premium resurfaces for oil, but economic trends offer balance

Nov. 9 (UPI) -- Crackdowns in Saudi Arabia were balanced by signs that European economic growth was stronger, but facing pressures ahead, to send oil prices higher Thursday.

The Saudi Center for International Communication said more than 200 individuals have been called in for questioning so far by the nation's attorney general. Arrests during the weekend, ostensibly part of a crackdown on corruption, sent oil prices soaring more than 3 percent early this week.

The Saudi Arabian Monetary Authority sought to allay investor concerns, however, by saying Wednesday it was "business as usual" for banks and corporations in the oil-rich kingdom, though what seems to be a grab on power solidifies Riyahd's position of pushing for higher oil prices ahead of plans to offer public shares in state-owned oil company Saudi Aramco.

Meanwhile, European data offered mixed signals in early morning trading. Real growth in gross domestic product for the European nations that use the euro currency is on pace to expand at 2.2 percent for its fastest pace in a decade.

"The EU economy is performing well overall. Economic growth and job creation are robust, investment is picking up and government deficit and debt are gradually decreasing," Valdis Dombrovskis, the commissioner in charge of financial stability, said in a statement. "There are however significant differences across member states, with some of them still experiencing considerable slack in the labor market."

Momentum slows with growth for the euro area and broader European Union easing to 2.1 percent next year and 1.9 percent in 2019.

The price for Brent crude oil was relatively even moments before the opening bell in New York to trade at $63.47 per barrel, a gain of less than 1 percent from the previous close. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.18 percent to $56.92 per barrel.

In other economies, The Conference Board said its leading economic index for Japan declined 0.1 percent in September.

In Quebec, Bank of Canada Gov. Stephen Poloz said inflation in advanced economies was soft, but fundamentals were strong, adding "the laws of supply and demand have not been repealed."

Crude oil prices continue to test new highs, after breaking two-year records in recent sessions. A commentary sent by email from commodity pricing group S&P Global Platts said the bulls still have it.

"Bullish sentiment has returned to the market as of late, with contributors including conflict in the Middle East, expectations OPEC will extend production cuts at their upcoming meeting, the U.S. oil rig count continuing to trend downward, and the belief that the global market is approaching balance," the statement read.