Brent closes up, U.S. crude down after Saudi king dies

Fri Jan 23, 2015 4:48pm EST
 
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By Samantha Sunne

NEW YORK (Reuters) - Brent crude was buoyed on Friday by market uncertainty over the future of Saudi oil output, while U.S. crude fell on more signs of oversupply.

Saudi Arabia's new king, Salman, who took the throne on Friday morning after the death of his brother Abdullah, is expected to continue OPEC's policy of keeping oil output steady to protect market share.

Some traders did not want to believe that, "clinging on some faint hope that the news is wrong, the Saudis can't possibly mean what they're saying," said Walter Zimmerman, chief technical analyst at United-ICAP.

OPEC announced last November it would keep output steady at 30 million barrels a day, despite pleas from some members for it to cut output to support prices and revenues.

Stuart Glickman, an equity analyst at S&P Capital IQ, said there was no indication OPEC would cut production soon.

"It's a calculated bet that the shale producers in the U.S. can't withstand the pain the way OPEC can," Glickman said. "And I think they're probably right."

Brent LCOc1 closed up 27 cents at $48.79 a barrel. U.S. crude settled down 72 cents at $45.59.

Reports of a partial shutdown at BP's oil refinery in Whiting, Indiana, weighed on U.S. crude. Sources familiar with the plant's operations said they did not know when the 90,000-barrel-per-day (bpd) crude distillation unit would be restarted.   Continued...

 
A man fills up his car at a petrol station in Rome January 6, 2015.   REUTERS/Max Rossi