Saudi oil policy - just took turn for the worse

[chancy]

Hello Everyone:
Who said life isn't exciting! Now every government is scrambling! Wonder when taxes are going up?
chancy


Link:
http://www.cnbc.com/id/102361930?par=cnbcsocial&__source=cnbcsocial%25257Cusnews


Article:
Saudi oil policy - just took turn for the worse
John Kilduff, parter at Again Capital
4 Hours AgoCNBC.com January 22, 2015

In earlier time, the death of Saudi Arabia's King Abdullah bin Abdulaziz Al Saud would have rocked the oil market. The succession plan has always pointed in a direction away from U.S. interests and a turn toward an even harder line on Middle East issues. The antipathy toward Iran will be levered up, and the various Sunni-Shia battles will likely see greater escalation.

Oil prices have quickly jumped $1.00 per barrel on the news in a knee-jerk reaction to the uncertainty. What is more likely is an even greater commitment to over supplying the market, in attempt to drive out higher cost producers and hurting Iran and Russia as an additional benefit.

King Abdullah did push for modernization of Saudi society, allowing for more rights for women, but those efforts are now likely to be tabled.

There is a famous picture of King Abdullah walking and-in-hand with President George W. Bush through a patch of Blue Bonnets at W's ranch in Crawford Texas, when oil prices were surging circa 2007.

While the short-term plan is likely to attempt to hurt frackers, Iran and Russia via an over-supplied market, the longer-term implications are for oil supply policies that are more hostile toward western consumers. In addition, the appetite for bringing the proxy war to Iran and other Shiite factions in the region will rise, which result in a return of the geopolitical risk premium in the years ahead.

U.S.-Saudi relations and longer-term Saudi oil production policy just took a turn for the worse with the death of King Abdullah.

[giovonni]

i wouldn't be to fast to proclaim that ...

He's part of the establishment (tribe) leadership and probably won't rock the boat on all that oil quite yet.

Salman of Saudi Arabia (http://en.wikipedia.org/wiki/Salman_of_Saudi_Arabia)

[A Voice from the Mountains]

i wouldn't be to fast to proclaim that ...

He's part of the establishment (tribe) leadership and probably won't rock the boat on all that oil quite yet.

Salman of Saudi Arabia (http://en.wikipedia.org/wiki/Salman_of_Saudi_Arabia)

That family has been historically, yes.

But the thing is, we are living in times of great change. The Saudis have also been making very good friends with the Chinese and have apparently become antagonized by the Pentagon. So we will have to wait and see how this will go.

[Calz]

So we will have to wait and see how this will go.




... indeed ...

[chancy]

Hello Everyone:
Here's some more about Saudi oil and other info regarding oil.
chancy


Link:
https://ca.news.yahoo.com/oil-jumps-saudi-kings-death-amid-huge-market-012124992--finance.html


Article:
Oil jumps as Saudi king's death feeds market uncertainty
ReutersBy By Henning Gloystein | Reuters – 3 minutes 49 seconds ago
January 6, 2015. REUTERS/Max Rossi
By Henning Gloystein

SINGAPORE (Reuters) - Oil prices jumped in Asian trading on Friday as news of the death of Saudi Arabia's King Abdullah added to uncertainty in energy markets already facing some of the biggest shifts in decades.
Abdullah died early on Friday and his brother Salman became king, the royal court in the world's top oil exporter and birthplace of Islam said in a statement carried by state television.
U.S. benchmark WTI crude futures rose more than 2 percent to a high of $47.76 a barrel, but had eased back to $47.09 by 0135 GMT.
International Brent crude futures rose to a high of $49.80 a barrel shortly after opening before easing back to $49.35 a barrel by 0152 GMT, up 1.71 percent.
"The fear of the unknown is going to be supportive to crude oil prices," said John Kilduff, partner, Again Capital LLC in New York.
"King Abdullah was the architect of the current strategy to keep production high and force out smaller players instead of cutting," he added.
Kilduff also said that the new king was known as a defender of Saudi Arabia's interests and that the market would expect him to keep production high.
The Saudi King's death comes amid some of the biggest shifts in oil markets in decades.
Oil prices have more than halved since peaking in June last year as soaring supplies clash with cooling demand, due to economic slowdown in Europe and Asia as well as improvements in energy efficiency, made during times of high prices.
Booming U.S. shale production has turned the United States from the world's biggest oil importer into one of the biggest producers, producing more than 9 million barrel per day.
To combat soaring output and falling prices, many oil exporters, such as Venezuela, wanted the 13-member Organization of the Petroleum Exporting Countries (OPEC) to cut output in order to support prices and revenues.
Yet, led by Saudi Arabia, OPEC announced last November it was keeping output steady at 30 million barrels per day.
Brent, which had already fallen to $77 per barrel by the time of the OPEC meeting, dropped another quarter over the next month as the market digested the fact OPEC would not come to the rescue.
OPEC's decision not to act, led by Saudi Arabia, was aimed at defending market share against U.S. shale producers as well as other non-OPEC exporters such as Brazil or Russia.


(This story was corrected to say the United States is one of the top oil producers in paragraph 8, and not the biggest)
(Additional reporting by Robert Gibbons in New York; Editing by Ed Davies)

[giovonni]

Change is always inevitable, but don't expect much from the House of Saud.

If the reign stops torturing at full throttle and allows women to drive, i might change my mine ... :rolleyes:

PS ~ the markets usually jump up & down after such occurrences.

[Calz]

Up there on the "totem pole" to be sure ...


http://www.resonoelusono.com/Cartoons/BushKissSaudi.png

[giovonni]

Change is always inevitable, but don't expect much from the House of Saud.

If the reign stops torturing at full throttle and allows women to drive, i might change my mine ... :rolleyes:

PS ~ the markets usually jump up & down after such occurrences.

here's some more insight into all this ...

House of Saud divided: Generational shift seen in royal succession battle (http://www.csmonitor.com/World/Middle-East/2015/0109/House-of-Saud-divided-Generational-shift-seen-in-royal-succession-battle)

[giovonni]

the latest ...

Saudi Arabia’s new King Salman moves quickly to settle future succession (http://www.theguardian.com/world/2015/jan/23/saudi-arabia-king-salman-succession-abdullah)

[WhiteFeather]

And I thought the drop in oil prices was the account of this.

http://www.greencarreports.com/news/1088626_hydrogen-fuel-cell-cars-to-come-from-toyota-hyundai-honda

[A Voice from the Mountains]

I believe this is also a big role in things, WhiteFeather. :)

There seems to be an all-out war on big oil. Whether it comes from the US, Russia or Saudi Arabia, it makes no difference. There is Tesla in the US, there are multiple companies in Europe launching vehicles that need very little or no gasoline, and the Japanese and US Navy are trying to launch technologies that use saltwater to make electrical energy.

In the case of Europe, you can see that they are really even being forced into this situation by the fact that Russia has just cut off a massive amount of oil to them, and they have no immediate infrastructure to replace what they were getting. Instead of building new oil pipelines they might as well invest in a completely different form of energy.

Big oil is also preventing disclosure from happening, as they would obviously lobby (through military industrial connections) against advanced energy technologies coming out to the public and permanently sealing the oil market into its tomb.

[Mercedes]

And I thought the drop in oil prices was the account of this.

http://www.greencarreports.com/news/1088626_hydrogen-fuel-cell-cars-to-come-from-toyota-hyundai-honda

Too expensive I would say!!

[conk]

With continued low prices at the pump, look for greedy politicians to mount campaigns for tax per mile driven.