LONDON: Oil jumped to its highest in over two years on Monday as Saudi Arabia’s crown prince cemented his power through a crackdown on corruption, while world shares eased a notch and major currencies traded in tight ranges.
Oil prices reached their highest since July 2015 as Mohammed bin Salman’s purge led to arrests of royals, ministers and investors including prominent billionaire investor Alwaleed bin Talal.
Another day, another Saudi prince dead
The news stirred concerns of Middle Eastern money pulling out of global financial markets. A weekend call by China’s central bank governor for tougher financial regulation also hit investor sentiment. Brent futures were up over half a percent at $62.49 a barrel. US crude added half a percent to $55.91.
Saudi Arabia’s crackdown
Shares in French hotel group Accor fell as much as 1.7 percent at the open, the biggest of the CAC 40 fallers, after its third biggest shareholder Prince Alwaleed bin Talal was arrested in the Saudi Arabian crackdown. Prince Alwaleed, a nephew of the king and owner of investment firm Kingdom Holding, invests in firms such as Citigroup and Twitter.
Saudi Arabia freezes accounts of detained princes, businessmen
He was among 11 princes, four ministers and tens of former ministers detained, three senior officials told Reuters on Sunday. “MbS’s (Mohammed bin Salman’s) accumulation of power runs the risk of prompting the Kingdom to shift further away from consensus-based policymaking, ruffling more feathers within the royal family as well as those closely tied to it,” said Jason Tuvey, Middle East economist at Capital Economics. “The big risk here is of a backlash against MbS from these elites that undermines his authority and raises the Saudi risk premium.”
Published in The Express Tribune, November 7th, 2017.
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