Crude headed higher in Asia Monday as US-Saudi Tensions Continue

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 appeared headed higher on Monday as tension between the U.S. and Saudi Arabia over the death of Saudi journalist Jamal Khashoggi  continues.

ICE Brent was last quoted at US$80.00 a barrel, up 0.28 percent, while NYMEX West Texas Intermediate rose 0.55 percent to US$69.50.Brent settled up 49 cents to US$79.78 a barrel on Friday, while NYMEX WTI gained 47 cents to US$69.12 a barrel.

Last week, WTI’s discount to Brent widened to its most since June 8, hitting US$11.00 a barrel.

A week after Khashoggi went missing on Oct. 2, a bipartisan group of U.S. lawmakers sent President Donald Trump a letter triggering an investigation and possible sanctions under the Global Magnitsky Human Rights Accountability Act. However, since Khashoggi’s Oct. 2 disappearance, Trump has called Saudi Arabia an “incredible ally” and said the killing shouldn’t deter U.S. arms sales to the oil-rich kingdom, specifically citing a $110 billion arms sale he announced last year.

Treasury Secretary Steven Mnuchin, who arrives in Saudi Arabia Monday, said “the economic and strategic relationship between the United States and Saudi Arabia was too important to be derailed by an international uproar over the Saudis’ killing of a dissident journalist,” reported the New York Times. He also said it was premature to comment on sanctions while an investigation is ongoing.

Bullish bets on crude futures and options in New York and London fell by 37,080 contracts to 259,375 in the week to Oct. 16, to the lowest level since September, the Commodity Futures Trading Commission said Friday.