Oil traders have a new political risk factor to absorb from Saudi Arabia with the move by the powerful Crown Prince Mohammed bin Salman to detain some of the kingdom’s most prominent business people, officials and princes.

Saudi Arabia is the world’s second-largest crude producer, the biggest crude exporter and has the most spare production capacity of any oil-rich nation. As such, any unexpected political moves are “undesired” by traders, said Giovanni Staunovo, commodity analyst at UBS Wealth Management.

“Market participants are likely to price a risk premium until more clarity emerges how the political situation will develop,” said Mr Staunovo.

Even so, he and other analysts said it was unlikely there would be any change in oil policy, ahead of a meeting of energy officials inside and outside Opec this month. It is expected that ministers will extend a pact to curb production by 1.8m barrels a day throughout 2018 as producers seek to drawdown inventories and bolster prices.

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