Shares of energy producers rose after the arrests of high-ranking Saudis drove oil futures to a two-year high. Crude prices rose 2.5% to over $57 a barrel after officials in Saudi Arabia detained more than five dozen princes, ministers and prominent businessmen in a bid to tackle alleged corruption in the country. Analysts described the sweep as an effort by Crown Prince Mohammed bin Salman to consolidate his power. Meanwhile, Yemeni Houthi rebels fired a ballistic missile that reached the outskirts of the Saudi capital of Riyadh. The Saudis claimed that Iran was behind the strike and said it would be interpreted as an act of war. The latest developments suggest the oil rally will continue. "Oil Supply in the U.S. will continue to plummet into the end of this year," said Phil Flynn, senior market analyst at Price Futures Group. "Gas and diesel prices will remain elevated. Now with more tension caused by the Saudi Shakedown we will see more of a geopolitical risk premium in oil going forward." EOG Resources, long the leading shale company in the US, drilled a group of four wells in the Permian basin that initially produced an average of 5,000 barrels of oil per day, something analysts at brokerage Bernstein Research called a "staggering result," as reported earlier.
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(END) Dow Jones Newswires
November 06, 2017 16:12 ET (21:12 GMT)