Crude oil seen rangebound Monday over Khashoggi disappearance

Missing Saudi journalist Jamal KhashoggiSaudi journalist Jamal Khashoggi was killed in the Saudi consulate in Turkey on Oct. 2. (Image: Reporters Without Borders)

Crude oil prices are seen rangebound in Asia on Monday with the market focused on tensions between the U.S. and Saudi Arabia over the disappearance in Turkey of a critic of the Saudi royal family.

ICE Brent crude oil futures settled up 17 cents to US$80.43 a barrel on Friday, while NYMEX West Texas Intermediate rose 37 cents to US$71.34 a barrel.

Turkey has said that Jamal Khashoggi was tortured, killed and dismembered when he visited the Saudi consulate in Istanbul on Oct. 2. Khashoggi, who moved to the U.S. in July 2017, was a Saudi insider turned critic and a  columnist for The Washington Post. His disappearance and possible killing has led to many countries putting pressure on Saudi Arabia to conduct a thorough investigation and hinting at possible sanctions. An October investor conference in Riyadh, hosted by Crown Prince Mohammed bin Salman, has seen several high-profile guests cancel their attendance.

Turki Aldakhil, general manager of the government-owned Al-Arabiya news channel, warned in a Sunday Op-Ed that if the U.S. imposed sanctions on Riyadh it could cause oil prices to reach up to $200 a barrel — or even double that price.

“If U.S. sanctions are imposed on Saudi Arabia, we will be facing an economic disaster that would rock the entire world. Riyadh is the capital of its oil, and touching this would affect oil production before any other vital commodity. It would lead to Saudi Arabia’s failure to commit to producing 7.5 million barrels. If the price of oil reaching $80 angered President Trump, no one should rule out the price jumping to $100, or $200, or even double that figure,” Aldakhil wrote.

Last week, bullish bets on crude oil futures and options in London and New York fell by 36,652 contracts to 296,456 for the period ending Oct. 9, the U.S. Commodity Futures Trading Commission said. And drillers added eight oil rigs in the U.S. last week to bringing the total to 869 and marking the first gain in a month, Baker Hughes said on Friday.