Nov. 6 (UPI) -- Crude oil prices extended deeper into record territory on Monday as bullish sentiments set in and nerves rattled over a corruption crackdown in Saudi Arabia.
"Oil bulls are alive and kicking," Tamas Varga, an analyst at London broker PVM, said in an emailed market fundamentals report.
Oil prices have rallied for most of the third quarter on signs that an effort led by the Organization of Petroleum Exporting Countries to balance an oversupplied market with production cuts is working. Though balanced somewhat by strong U.S. oil production, higher crude oil prices have been supported by signs that OPEC members will extend their agreement deep into 2018.
An anti-corruption committee in Saudi Arabia detained four ministers and 11 princes as part of a widespread crackdown by royal order, adding to a sense of unease on the broader market.
"This is part of an overhaul to ensure transparency, openness and good governance," the government said in a weekend statement.
David Ottaway, a Middle East Fellow at The Wilson Center, said in a weekend statement emailed to UPI that the move by Crown Prince Mohammed bin Salman could make investors nervous about the so-called Vision 2030, which aims to draw more out of the non-oil private sector in Saudi Arabia. That could be telling as ministers from OPEC sit down later this month to discuss the fate of their multilateral production deal, which helped pull oil prices from last year's historic lows.
The price for Brent crude oil was up 0.53 percent at 9:10 a.m. EST to $62.40 per barrel, pushing deeper past a record last set in July 2015. The price for West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.38 percent to $55.85 per barrel.
The spread, or difference, between Brent and WTI makes U.S. oil competitive in some foreign markets. Slight declines in U.S. oil production, but historically record-setting exports, are making for a tighter domestic situation, giving some additional support to crude oil prices.
Vandana Hari, a market analyst and founder of Vanda Insights, said in a weekend report emailed to UPI that a slight dip in U.S. production, OPEC discipline and a steady rise in global demand means the floor price for Brent crude oil is probably now around $55 per barrel.
If OPEC ministers delay or dilute a decision on the production cuts, that could reignite oversupply fears and shave as much as $5 per barrel off the price for Brent crude oil, she said.