Saudis look set to dig in on oil prices

Some firming of oil prices was to be expected, given the Saudi-led coalition’s assault on Yemen and surging violence in Iraq and Libya – especially as markets are not projecting a major surge in short- or even medium-term Iranian output following the framework nuclear deal signed in Lausanne on 2 April. But market fundamentals suggest the oil price will remain soft into H2 2015, with little sign of a major shift in Saudi thinking ahead of the scheduled 5 June Organisation of the Petroleum Exporting Countries (Opec) ministerial meeting in Vienna.