Tag Archives | Saudi Arabia

Oil prices under pressure as US oil/product exports ramp up

On Monday, I discussed how OPEC abandoned Saudi Oil Minister Naimi’s market share strategy during H2 last year. Naimi’s strategy had stopped the necessary investment being made to properly exploit the new US shale discoveries. But this changed as the OPEC/non-OPEC countries began to talk prices up to $50/bbl. As CNN reported last week: “Cash is pouring […]

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US Permian’s shale oil surge highlights OPEC’s failed strategy

OPEC and Russia made a massive mistake last November when when they decided to try and establish a $50/bbl floor for world oil prices.  And now they have doubled down on their mistake by extending the deal to March 2018. They have ignored 4 absolutely critical facts:   Major US shale oil producers were already […]

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Oil market rebalancing myth looks close to its sell-by date

The myth of oil market rebalancing has been a great money-maker for financial markets.  Hedge funds were the first to benefit in H2 last year, as Reuters has reported, when: “OPEC and some of the most important hedge funds active in commodities reached an understanding on oil market rebalancing during informal briefings held in the […]

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Speculators’ tail wags oil market dog as paper trading dominates

Trading oil markets used to be hard work. You had to talk to all the major players all the time (not just message them), and learn to judge whether they were telling the truth or inventing a version of it.  You had to watch for breaking economic and political news.  And you needed your own […]

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Chart of the Year: US$, 10-year US interest rates begin to rise

Last year it was the oil price fall.  This year, there is no doubt that the US dollar has taken centre stage, alongside the major rise underway in benchmark 10-year interest rates.  As 2016’s Chart of the Year shows:   The US$ Index (black) has risen 12% since May against other major currencies (euro, yen, […]

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Futures markets, US shale, the big winners from OPEC meeting

There were only two winners from the past 3 months of OPEC’s “Will they?, Won’t they?” debate on output cutbacks. Iran wasn’t one of them – although the talks did emphasise its renewed ability to control the OPEC agenda.  Nor was Saudi Arabia, forced to accept the lion’s share of the proposed cutbacks. Instead, the […]

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ExxonMobil, Saudi Arabia, differ on oil outlook – or do they?

If asked about the outlook for prices, oil company CEOs normally duck the question.  And they certainly never disagree in public with Saudi Arabia, the world’s leading oil producer.  This is what makes the recent speech by ExxonMobil CEO, Rex Tillerson, so interesting: “I don’t quite share the same view that others have that we are somehow […]

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Oil heads back to $30/bbl and probably lower

There was never any fundamental reason why oil prices should have doubled between January and June this year. There were no physical shortages of product, or long-term outages at key producers. But of course, there was never any fundamental reason for prices to treble between 2009 – 2011 in the Stimulus rally, or to jump […]

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Naimi finally allowed to retire, Saudi oil policy stays the same

80-year olds are allowed to retire, even if they have to wait a year for final permission to be given.  But it seems a simple headline saying “Saudi Oil Minister retires after 69 year career” is not “exciting” enough in today’s media world?  So perhaps we can’t be too surprised to find some of the world’s […]

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Saudi plans to transform Aramco to energy /industrial company

“Within 20 years, we will be an economy that doesn’t depend mainly on oil“. With that one statement, deputy Crown Prince Mohammed bin Salman (pictured above), changed the outlook for oil and energy markets.  The world’s major oil producer, with the lowest cost, was signalling that the kingdom will no longer be supply-driven, focused on […]

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