Category:

Saudi Growth to Slow as Kingdom Adjusts to Cheaper Oil, IMF Says

Economic growth in Saudi Arabia is set to slow this year and next as the government is forced to reduce spending to compensate for lower oil prices, the International Monetary Fund said on Monday. Saudi Arabia’s gross domestic product will grow by 2.8 percent this year and 2.4 percent in 2016, the IMF said in e-mailed statement at the conclusion of its regular country consultation. That compares with 3.5 percent growth last year. Growth may expand to 3 percent in the “medium term,” it said. The world’s largest oil producer turned to the bond market this year for the first time since 2007 after oil prices fell by over 50 percent. The resulting budget deficit, which the IMF projects at 19.5 percent of GDP, may force Saudi rulers to abandon the kingdom’s traditional largess. Saudi Arabia needs “comprehensive energy price reforms, firm control of the public sector wage bill, […]

Posted On : Published By : Tom Whipple
Category:

Opinion: Saudi Oil Strategy: Brilliant Or Suicide?

« Leviton introduces 7.7 kW Evr-Green charging station | Main | Cal Energy Commission grants $2.4M for Class 8 fuel cell hybrid trucks at ports; $1.2M for PEV fleet and V2G software upgrade » by Dalan McEndree for Oilprice.com In the last quarter of 2014, in the face of possible oversupply, Saudi Arabia abandoned its traditional role as the global oil market’s swing producer and therefore it role as unofficial guarantor of existing ($100+ per barrel) prices. In October, Saudi sources first prepared the market with statements that the country would be comfortable with oil prices as low as $80 per barrel for “a year or two.” At the November OPEC meeting, the Saudi oil minister, Ali Al-Naimi, publicly announced Saudi Arabia would allow market forces to set prices. He argued that rapidly growing production outside OPEC made the existing status quo unviable, and that lower prices in the […]

Posted On : Published By : Tom Whipple
Category:

Suicide attack targets security forces at Saudi mosque

There was no immediate claim of responsibility for the attack in Asir, but ISIL has been blamed for recent attacks in Saudi [Al Jazeera] Saudi Interior ministry has said that 13 people were killed in a suicide attack on a mosque in the country’s southwest region bordering Yemen. The Interior Ministry’s statement said 10 of those killed in the attack on Thursday in the city of Abha in Asir province were members of the security forces. The attack on the mosque belonging to the emergency forces also injured at least nine others, the ministry added. Earlier, state media said 17 people were killed. Emir of Asir region visits injured in the bombing of special emergency forces mosque in Asir region. – SPA pic.twitter.com/xt8LStxHSg — Saudi Gazette (@Saudi_Gazette) August 6, 2015 Saudi Television said initial information indicated that the blast occurred after a suicide bomber detonated his explosive belt. It […]

Posted On : Published By : Tom Whipple
Category:

Saudi Arabia arrests hundreds of suspected ISIL members

Saudi Arabia has arrested 431 people suspected of belonging to Islamic State of Iraq and the Levant (ISIL) cells, and thwarted suicide attacks on mosques, security forces and a diplomatic mission, the interior ministry has said. In a statement on Saturday carried on the official state news agency, the interior ministry accused those arrested over the "past few weeks" of conducting several attacks, including an ISIL-claimed suicide bombing in May that killed 21 people in the village of al-Qudeeh, in the oil-rich eastern Qatif region. It was the deadliest assault in the kingdom in more than a decade. The statement said most of the 431 suspects were Saudi nationals, but also included other nationals from the Middle East and Africa. The report said authorities also stopped six successive suicide operations, which targeted mosques in the Eastern province, and timed with assassinations of security men. Related: How is ISIL expanding? […]

Posted On : Published By : Tom Whipple
Category:

Saudi tempers oil price hikes in Asia to defend market share

An oil tank is seen at the Saudi Aramco headquarters during a media tour at Damam city November 11, 2007. Saudi Arabia has increased the September prices for crude it sells to Asia by less than forecast, traders said on Thursday, as the world’s biggest oil exporter defends its market share amid slowing demand. Refining profits have fallen to the lowest level of the year in Asia, prompting refiners to cut output even as the Organization of the Petroleum Exporting Countries (OPEC) pumped at historic highs in July, helping to depress global oil prices to multi-month lows. [O/R] OPEC kingpin Saudi Arabia maintained output near record levels in July as the group showed no sign of wavering in its focus on defending market share instead of prices. [OPEC/O] Asia is the only region where Saudi Arabia raised oil prices in September. "The region’s refiners may rue the fact that […]

Posted On : Published By : Tom Whipple
Category:

Saudi Arabia Might Just Have Blinked In the Oil War

Kenny Rogers is probably not well known in Saudi Arabia but if recent speculation about the kingdom resorting to the international debt market is correct then the words of The Gambler should be called, loudly, from every minaret in Riyadh. If you don’t know Kenny’s signature song it’s the one which includes the refrain: “You’ve got to know when to hold em, know when to fold ‘em, know when to walk away, know when to run.” In the case of Saudi Arabia, and the unconfirmed reports of it seeking $27 billion in debt via an issue of bonds, it appears to be adopting the gamblers strategy of seeing off its opponents in the increasingly competitive oil world by calling “raise ‘em”. Betting The House (Of Saud) What the debt raising signals is that the kingdom is prepared to bet the house of Saud on a high-risk gamble based on […]

Posted On : Published By : Tom Whipple
Category:

Oil price unlikely to recover as Saudi refining hits market

An offshore oil platform is seen in Huntington Beach, California September 28, 2014. Oil prices are unlikely to recover soon as Saudi Arabia’s drive to boost its refining activities is expected to force refineries elsewhere to slow down their operations, thus creating an even bigger glut of unwanted crude oil. Two big new refineries in Saudi Arabia are adding to growing supplies of diesel and jet fuel, which could mean other refiners will use less crude as they respond to the oversupply of oil products. Oil prices currently near $50 a barrel are already under pressure, in part from an oversupply of fuels produced by refiners enjoying healthy margins from cheap crude as a result of the U.S. shale boom and record OPEC output. A big difference now is that the world’s largest oil exporter, Saudi Arabia, whose new refineries have added to a flood of the fuels now […]

Posted On : Published By : Tom Whipple
Category:

Saudi energy consumption is highest in MENA

The widely reported fall in Saudi Arabia’s crude oil exports in May — the first time in five months — led many to assume that this may counter the fall in crude oil prices. This is not the case. To start with, the fall in Saudi Arabia’s crude oil exports was reported by Saudi Arabia itself to the Joint Oil Data Initiative (JODI), a global organisation that includes Opec, IEA and many other energy organisations and individual nations. The fall in crude exports hides the rise in domestic refining and product exports in addition to the seasonal rise in direct crude oil burn for power generation. While Saudi Arabia’s production in May stood at 10.333 million barrels a day (mbd) slightly higher than April’s, its exports were 6.935 mbd, down from 7.737 mbd a month earlier, domestic refineries ran 2.4 mbd, up from 2.2 mbd in April and 20 […]

Posted On : Published By : Tom Whipple