|OPEC reassures markets King Fahd's death will not hike prices
|The kingdom 'will not change its oil policy' and will work on satisfying market demand
Oil kingpin Saudi Arabia and other OPEC members sought to reassure jittery oil markets on Monday, saying there was likely to be no change in Riyadh's policy following the death of King Fahd.
"I cannot imagine that there will be any particular change" in Saudi Arabia's internal or external policies, the Saudi ambassador to Britain, Prince Turki al-Faisal, told reporters in London.
Asked whether this extended to oil policy, the prince, a nephew of the late king, replied: "Absolutely."
World oil prices jumped above $61 a barrel in London after the announcement of Fahd's death, although traders said King Fahd's death would be unlikely to cause major supply disruptions.
King Fahd was for 23 years at the helm of the world's largest oil producer, which currently has output of about 9.5 million barrels per day and with the capacity for an additional 1.5 million barrels.
Crown Prince Abdullah, who has been the de facto ruler of the kingdom for the last decade since Fahd suffered a stroke, was promptly anointed successor and powerful Defense Minister Sultan bin Abdel Aziz was chosen as crown prince.
A senior Saudi oil official told AFP that Riyadh will keep output at levels required to ensure market stability.
"Saudi Arabia will not change its oil policy and will work on providing the oil supplies needed by world markets and is keen on avoiding troubles," said the official who did not wish to be identified.
OPEC President and Kuwaiti Energy Minister Sheikh Ahmad Fahd al-Ahmad al-Sabah said he expected the smooth succession in its neighbor to restore calm to world oil markets after the initial rise in prices.
"Everyone knows that Saudi Arabia is the biggest oil-producing country and there might be an immediate upward move in the price of the barrel, which is a matter that reflects the importance of Saudi Arabia," Sheikh Ahmad said.
"Undoubtedly, there will be fears in the market at this point, and until the situation becomes clear," he told Dubai-based satellite channel Al-Arabiyya.
But he expressed confidence that prices would fall back.
"The pledge of allegiance to Crown Prince Abdullah... will give confidence," the Kuwaiti minister said. "And as they will go on the same path, the situation will be calmer after this sad news." Iran, OPEC's second oil producer, also said it expected that prices would not remain high for long after the king's death.
"His death would probably cause a temporary fluctuation in the world's oil prices, but it will not have permanent impact," Oil Minister Bijan Namdar Zanganeh told the student news agency ISNA.
"Given that Saudi Arabia's policies have been so far adopted by Abdullah, the Saudi oil policies should not naturally be changed. Therefore, the shock of King Fahd's death will be temporary in the oil market." Analysts also agreed that the rise in oil prices will be short-lived.
"It was expected that oil prices would go up, but they will return to normal soon, particularly as the Saudi oil policy is stable and will not change because of the death of the king," Saudi economic analyst Hassan Abu Haliqa told AFP.
Kuwaiti oil expert Kamal Harami told AFP: "I expect crude prices to be affected ... but (King Abdullah) will continue the same policy in order to ensure the stability of the markets and prices."
New York's main contract, light sweet crude for delivery in September, climbed $057 to $61.14 in electronic dealing on Monday.
In London, the price of Brent North Sea crude oil for delivery in September gained $0.54 cents to $59.9 per barrel.
The Daily Star