The world's largest exporter of crude oil, the Kingdom of Saudi Arabia, recently announced a plan for its post-oil future. If a country almost synonymous with the oil economy can see the need for such a plan, how can the rest of the world, particularly the United States, the world's largest consumer of petroleum, not see the necessity of such foresight?
The OPEC meeting is only a week away, but the chances of a positive result are as remote as ever. Rising oil prices, the heightened rivalry between Saudi Arabia and Iran, and Saudi Arabia’s willingness to go it alone will make a deal all but impossible. "I don't think OPEC will decide anything," a source from a major oil producer in the Middle East told Reuters. "The market is recovering because of supply disruptions and demand recovery." An OPEC delegate told Reuters that any changes to the cartel’s policy is off the table. “Nothing. The freeze is finished,” the OPEC source said.
As we warned previously, the devaluation, or breaking of the Saudi Riyal peg to the dollar, could be the black swan event for crude oil and the recent weakness in SAR forwards - while not as violent as Nigeria's Naira - certainly signals a renewed market fear that breaking the peg is imminent. It appears Saudi officials are none too pleased with the free markets speculating on this devaluation and as Bloomberg reports, banks in Saudi Arabia are coming under fresh pressure over products that allow speculators to bet against the kingdom’s currency peg, according to people with knowledge of the matter, which were supposedly banned in January.
While Saudi Arabia's initial response (economic threats) to Washington's sudden renewed legislative interest in the '28 pages' may or may not have helped add fuel to the fire of those who believe the country has something to hide, it has also tried to have a softer approach to the issue, one that perhaps works the most effectively in Washington: Lobbyists.
U.S. foreign policy is such a disastrous joke, trying to keep up with it is essentially a full time job. In case you still had any doubt as to why ISIS and other assorted terrorists seemed virtually unstoppable in Syria until Russia became involved, the following piece should clear things up.
Poorer oil-producing countries which took out loans to be repaid in oil when the price was higher are having to send three times as much to respect repayment schedules now prices have fallen. But while these already poor and corrupt OPEC nations were the biggest losers, one country was a huge winner, the country that provided the billions in virtually risk-free, oil-collateralized loans to any country that requested them. China.
Republican Kevin Cramer from North Dakota is cosponsoring a bipartisan bill that will set up a commission to probe whether OPEC has used unfair means to bolster its dominance over the market and propose possible remedies on the grounds that the matter is important from a national security standpoint, reports the Financial Times. Though similar efforts in the past against OPEC have been ineffective, another cosponsor, Republican Trent Franks, is optimistic about the outcome this time around. “If our bill does nothing more than to raise this question on to the agendas of business leaders and policymakers . . . it will have achieved something,” he said.
We have reported for years that Russia and China have been doing everything they can to displace the use (and influence) of the US dollar. Of course, as the US has been playing geopolitical games, China and Russia have been working on strengthening their relationship with one another. At the end of 2015, China had become Russia's biggest oil customer, and as of April, Russian oil shipments to China hit a record high. Russia has also surpassed Saudi Arabia as the biggest crude exporter to China.
Buy gold as it is an “extremely low-risk asset” is the advice of Professor Kenneth Rogoff to emerging market, creditor nation central banks including the People’s Bank of China (PBOC). “There is no limit to its price ...” he said ...
One reality in the markets is that despite the best efforts of analysts and traders, no one ever knows with any degree of certainty what will happen to the price of an investment in the future. Oil exemplifies that premise right now. All year there has been a tremendous amount of discrepancy in predictions for oil prices with some commentators looking for prices of $10 a barrel and others expecting prices near $100.
Amid a backdrop of oil prices near $50 per barrel, a sharp drop in Nigerian production due to sabotage, turmoil in Venezuela, Saudi Arabia operating with a new oil minister, and Iran aggressively pumping close to pre-sanction levels; the next OPEC meeting on the 2nd of June will act as little more than a forum for continued altercations between Saudi Arabia and Iran.
The Last Minutes Of Crashed EgyptAir Flight MS804: 22,000 Foot Drop In 2 Minutes, Violent Swerving; Crash Debris FoundSubmitted by Tyler Durden on 05/19/2016 09:11 -0400
Most critical appears to be the 2 minute interval from 3:27 to 3:29, when according to the Greek defence minister cited by the Guardian, there was a dramatic change in the plane's attitude and direction. It was in this two minute period when the plane made a 90 degree swerve left and dropped from 37,000 feet to 15,000 feet before swerving 60 degrees right and vanishing at 10,000 feet ten to 15 miles inside Egyptian air space.
On Tuesday, the US Senate passed the Justice Against Sponsors of Terrorism Act. 'Coincidentally', on the same day, the New York Times revealed a document published by the National Archives that appears to offer a glimpse into potentially damning information contained in the so-called ‘missing’ 28 pages concerning the attacks on September 11, 2001. Pushing back on the criticisms that the bill was only passed to specifically target Saudi Arabia (which it was of course), Schumer stated "Look, if the Saudis did not participate in this terrorism, they have nothing to fear about going to court."
Saudi Arabia Admits To A Full-Blown Liquidity Crisis: Will Pay Government Contractors With IOUs, DebtSubmitted by Tyler Durden on 05/18/2016 11:04 -0400
Now, Saudi economic (and liquidity) problems just spilled out into the open, because Bloomberg reported moments ago, Saudi Arabia has told banks it is considering paying some outstanding bills to contractors with government-issued bonds, citing people with knowledge of matter say. Contractors would be able to hold bond-like instruments until maturity. Bloomberg adds that issuing bonds is one of several options being considered.
After a month-long scare campaign waged by Saudi Arabia, and in no small part the Obama administration, which went so far as to threaten it would dump its US Treasurys, if the US were to pass a bill that would hold it legally liable for the Sept 11 attacks, it will be up to Obama to veto the bill because moments ago the Senate unanimously passed said bill, bringing Congress closer to a showdown with the White House.