Oil surges to two year high after Saudi purge

Saudi Arabia has initiated a broad anti-corruption purge which included dozens of ministers and prominent businessmen in the country, in a call for combating corruption.

Prince Alwaleed bin Talal, one of the world’s richest men, as reported by Forbes billionaires list, was among one of the princes detained amid the latest crackdown on corruption, sending the shares of his investment company Kingdom Holding KHC down by 10%. As a result, his net worth slashed by nearly $2 billion to $16.8 billion, from $18.7 billion a day earlier, according to Forbes rankings.

Following the news, Oil traders reacted to the recent moves in the kingdom, the world’s biggest oil reserve, sending oil prices to two year highs. US crude oil traded above $57 per barrel, while Brent crude hovered at $62 a barrel.

Higher oil prices are seen beneficial for market capitalization, given plans to list part of state-owned oil giant Saudi Aramco on New York SE next year. At the same time, it can raise risks for inflation in Oil importing countries.

Economic overview by Reem Aboul Hosn, Research and Market Analyst Officer, CFI Markets Ltd.