U.S. oil prices edge down from near 2-1/2 year high

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© Reuters. An oil rig drilling a well at sunrise near Midland, Texas© Reuters. An oil rig drilling a well at sunrise near Midland, Texas

TOKYO (Reuters) – U.S. oil prices edged lower on Tuesday after posting the biggest gains in six weeks a day earlier, buoyed by moves by Saudi Arabia’s crown prince to tighten his grip on power and a drop in U.S. drilling rigs.

U.S. West Texas Intermediate (WTI) crude (CLc1) slipped 13 cents, or 0.2 percent, to $57.22 a barrel by 0028 GMT. The contract surged 3 percent on Monday, the biggest percentage gain since late September.

Brent crude futures (LCOc1) were yet to trade. On Monday, they closed 3.5 percent higher, also their biggest percentage gain in about six weeks.

Both benchmarks hit their highest since mid-2015 during the session.

Saudi Crown Prince Mohammed bin Salman moved to shore up his power base with the arrest of royals, ministers and investors, including billionaire Alwaleed bin Talal and the powerful head of the National Guard, Prince Miteb bin Abdullah.

The arrests, which an official described as part of “phase one” of the crackdown, are the latest in a series of dramatic steps by Prince Mohammed to tighten his grip at home.

Analysts said they do not see Saudi Arabia, the world’s largest oil exporter, changing its policy of boosting crude prices for now.

Saudi Energy Minister Khalid al-Falih said that while there is “satisfaction” with a production-cutting deal between the Organization of the Petroleum Exporting Countries and other producers led by Russia, the “job is not done yet.”

OPEC is expected to extend a cut of around 1.8 million barrels per day into the whole of 2018.

U.S. drillers cut eight oil rigs last week, the biggest reduction since May 2016, helping to support prices.

While supplies are tightening, analysts said demand remains strong.

Speculators increased their bets on gains in the price of Brent to a record high.

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