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Oil prices fall on market relief over Saudi policy

[LONDON] Oil prices declined on Monday, with US crude falling close to a nearly six-year low, as Saudi Arabia's new King Salman moved to assuage fears of an unstable transition and any policy change in the world's largest oil exporter.

Salman was quick to retain veteran Saudi oil minister Ali al-Naimi on Friday, in a message aimed at calming a jittery energy market following the death of King Abdullah last week. "Oil markets will take comfort from the speed and stability of the succession process, and the announced pledge for continuity of policy," said Majid Jafar, chief executive of Crescent Petroleum, a UAE-headquartered oil and gas producer focussed on the Middle East.

March Brent crude was trading down 86 cents at US$47.93 a barrel by 0932 GMT, wiping out light gains made on Friday, but off an early low of US$47.57.

West Texas Intermediate (WTI) crude for March delivery was at US$44.97 a barrel, down 62 cents. Front-month WTI earlier touched an intraday low of US$44.35, just above the US$44.20 hit on January 13, which was the lowest since April 2009.

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In Greece, the left-wing Syriza won a decisive victory against the ruling conservatives in Sunday's election, setting up a possible confrontation with international creditors.

Brent may revisit its January 13 low of US$45.19 per barrel over the next four weeks, Reuters market analyst Wang Tao said.

Brent's premium to WTI CL-LCO1=R widened to more than US$3 after U.S. crude stockpiles rose by the highest amount in over two decades. "Oil markets decoupled as WTI sank," Stephen Schork, editor of the Pennsylvania-based Schork Report, said in a note. "As of Friday we have switched our daily bias to bearish in WTI."

Money managers cut their net long US crude futures and options positions in the week to January 20, the US Commodity Futures Trading Commission said on Friday.

In the United States, the East Coast from Philadelphia to New York City to Maine was bracing for a potentially historic blizzard on Monday.