In the latest clear sign that low oil prices are taking their indirect toll not only the US shale sector, leading to billions in capex cuts and hundreds of thousands of lost oil and gas jobs, on Friday Saudi newspaper al-Watan reported that the multinational construction conglomerate Saudi Binladin Group (which was founded in 1931 by Sheikh Mohammed bin Laden Sayyid, father of Osama bin Laden who was removed as a shareholder in the business in 1993 and disowned by the family) has laid off 50,000 staff as pressure on the industry rises amid government spending cuts to survive an era of cheap oil.
Akin to ancient Rome, the United States has over-extended herself. She has created a climate that could easily be transformed into a war on a slight pretext. Wars, as it is well known are also a means a nation can extricate itself from debt and financial responsibility. The dying Petrodollar system has been on life support for some time, and it appears other nations such as the BRIC’s are taking the initiative to return to a true monetary standard. This is the same gold and silver standard that the U.S. should never have left in the first place.
Russia and Saudi Arabia have been (relatively) quietly fighting for market share in China ever since oil prices started their downward spiral in mid-2014 - now the battle is heating up, and teapot refineries are what could tip the balance.
It is increasingly certain that the future will not be like the past. Previous downturns have been equally devastating but the primary causes eventually reversed themselves; low commodity prices recovered and damaging government policies were rescinded. This recovery will be different for a variety of reasons which will combine to cap growth, opportunity and profits, even if oil and gas prices spike. The following major changes appear permanent...
The initial refugee welcome in Germany is rapidly turning to rejection as the nation plan to ban EU migrants from most unemployment benefits for five years after arrival as a senior German politician has called for an "Islam law" that would limit the influence of foreign imams and prohibit the foreign financing of mosques in Germany. As The FT reports, the proposals, which are far tougher than had been expected even a few months ago, highlight the government’s concern over growing public anxiety about immigration and the related advance of the Alternative for Germany party, the most popular rightwing grouping since the second world war.
Having risen all day on the back of the weaker dollar now sliding to nearly one year lows, moments ago oil just wiped out all its intraday gains and tumbled to unchanged, losing almost a dollar in seconds.
In one of the least surprising highlights from the ongoing earnings season, yesterday we reported that as oil continues to rise, US shale companies are starting to resume mothballed production. And now, according to the latest Reuters production survey, in the aftermath of the failed Doha oil freeze agreement, OPEC will be the next to boost production in the coming month, expanding supplies from an already oversupplied 32.46MMb/d to 32.64MMb/d. Finally, Reuters just blasted that Saudi Arabia is boosting its exports to near-record high levels.
Following yesterday's Yen surge in the aftermath of the disappointing BOJ announcement, the pain for USDJPY long continued, with the key carry pair tumbling as low as 106, the lowest level since October 2014 before stabilizing around 107, and is now headed for its biggest weekly gain since 2008, which in turn has pushed the US dollar to to its lowest close in almost a year as signs of slowing growth in the U.S. dimmed prospects for a Federal Reserve interest-rate increase. As a result, global stocks fell and commodities extended gains in their best month since 2010.
Sunday, April 17th was the designated moment. The world’s leading oil producers were expected to bring fresh discipline to the chaotic petroleum market and spark a return to high prices. But what happens if confidence in the eventual resurgence of demand begins to wither? Then the incentives to cooperate begin to evaporate, too, and it’s every producer for itself in a mad scramble to protect market share. This new reality -- a world in which “peak oil demand,” rather than “peak oil,” will shape the consciousness of major players -- is what the Doha catastrophe foreshadowed.
With the price of oil creeping ever higher, mothballed shale oil production is quietly going back online.
The famous Hollywood adage - 'nobody knows anything' - seems to perfectly apply to the current turbulence in the oil market. So in an effort to clarify where the global oil economy is heading to, let’s engage in a Battle of the Oil Analysts. Relying on these Oil Analysts (OA) does not necessarily mean you will be handed straightforward answers, but perhaps with some luck you will see a ray of light.
It’s been about 15 years now since passenger airliners struck the World Trade Center towers on 9/11, and we are still suffering the consequences of that day, though perhaps not in the ways many Americans might believe. The 9/11 attacks were billed by the Bush Administration as a “wake-up call” for the U.S., and neocons called it the new Pearl Harbor. But instead of it being an awaking, the American public was led further into blind ignorance. Clearly, after 15 years of disastrous policy, it is time to admit that the U.S. response to 9/11 has damaged us far more than the actual attacks ever could.
Last week, Nazimuddin Samad sat at his computer at home and penned a few critical lines against the Islamist drift of his country, Bangladesh. The day after, Samad was approached by four men shouting "Allahu Akbar!" ("Allah is great!") and hacked him to death with machetes. But this and other shocking killings have not been worth of a single line in Europe's newspapers. Is it because these bloggers are less famous than the cartoonists murdered at Charlie Hebdo? Is it because their stories did not come from the City of Light, Paris, but from one of the poorest and darkest cities in the world, Dhaka? No, it is because the West has capitulated on freedom of expression.
The Vision for 2030 is mostly smoke and mirrors. Saudi Arabia probably cannot replace the money it will lose if oil goes out of style and so is doomed to downward mobility and very possibly significant instability. It has been a great party since the 1940s; it is going to be a hell of a hangover.
Relations between Iran and Saudi Arabia, which supposed had thawed as part of Obama's landmark 2015 nuclear deal which also allowed Iran to resume exporting its oil, are once again on the fence following a statement by Iran's Supreme Leader, Ayatollah Ali Khamenei, which accused the United States of scaring businesses away from Tehran and undermining a deal to lift international sanctions.