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Global oil prices posted modest gains Monday after Saudi Arabia ousted its influential Energy Minister over the weekend in a move that could signal an upcoming shift in policy from the world's second-largest producer.

Khalid al-Falih, who has served as the Kingdom's Energy Minister since 2016, will be replaced by Abdulaziz Bin Salman, a son of King Salman's son and a long-time member of the Ministry's senior team, the Kingdom said late Saturday. Price Abdulaziz will speak for the first time in his new role at the World Energy Congress in Abu Dhabi later today.

"The move has created a lot of speculation as to what the motive for the change might be, but one thing is certain, Saudi Arabia is not happy with current oil prices, as they are well below where they need to be in order to balance their budget," said Saxo Bank's chief commodity strategist Ole Hansen.  

"But at this stage, it's as much as a demand question as it is a supply question, so I don't think there's any major signalling in the decision, even as we are seeing the market trying to break higher," he added. "That said, the oil markets aren't determined by what's happening in Saudi Arabia, but by what's happening in Beijing and Washington, and any escalation on the trade war front could send it back down again."

Brent crude contracts for November delivery, the global benchmark, were seen $1 higher from their Friday close in New York and changing hands at $62.54 per barrel, extending their two-week gain to around 6.8%. WTI contracts for October, the U.S. benchmark, were seen $1  higher at $57.57 per barrel in early European trading.

Change in Saudi energy minister will not change policy of OPEC+, too early to say whether deeper production cuts are needed next year: Oman's oil minister Al Rumhi #oott

— Giovanni Staunovo�� (@staunovo) September 9, 2019

The American-educated al-Falih, who also served as chairman of Saudi Aramco, was left out of the state-owned oil giant's plans to list as a public company earlier this month when he was removed from that role by Bin Salman and was also stripped of his role in overseeing industrial development.

 
The decision to replace al Falih raises major questions for global oil markets, given Saudi Arabia's influence over the OPEC cartel and its ability to get co-operation from Russia on major production cut agreements in order to control prices.

Al-Falih has also pushed backed against criticism from President Donald Trump over OPEC's production cut agreements, which are taking 1.2 million barrels from the market each day until at least the end of this year, while developing a close relationship with Russia's Energy Minister Alexander Novak,

But with Saudi Arabia losing its rank as the world's biggest producer to the United States under al Falih's watch, and global oil prices hoovering around the $60 mark despite deep OPEC cuts, well under the $80 per barrel level widely seen as necessary to balance the Kingdom's ballooning budget, a fresh approach to supply controls could be on the cards.

Al Falih said in early July that the then trade detente between the U.S. and China, as well record American production from its recently-tapped shale fields, meant global markets could weather an extension of the output cuts.

"I have no doubt in my mind that U.S. shale will peak, plateau and then decline like every other basin in history," Al-Falih said at the time. "Until it does I think it's prudent for those of us who have a lot at stake, and also for us who want to protect the global economy and provide visibility going forward, to keep adjusting to it."

U.S. crude output has hit record highs for the past two years, thanks in part to drilling and production of shale deposits in the Permian Basin, with the Energy Department forecasting that output output from the country's seven major shale formations, including the Permian Basin and the Anadarko and Eagle Ford regions, will hit an all-time high of 8.52 million barrels per day over the summer.

Overall U.S. crude output slipped to 12.4 million barrels last week, the EIA said Thursday, from a record 12.5 million barrels in the prior seven-day period.