Crude prices rose above $61 a barrel Monday after the death of Saudi Arabia’s King Fahd, but investors seemed comforted by reassurances that the nation’s oil policy would not change.
Fahd has not been involved in running the country since his stroke in 1995. The Crown Prince, now King, ran the country. There was no change in policy or even real change in leadership to be expected. A rational market should have already anticipated this inevitable event. If anything this reduces uncertainty about Saudi oil production, etc. so once again, the effect, if any, should have been a drop in prices.