On January 2, 2018, Byron R. Wien, Vice Chairman in the Private Wealth Solutions group at Blackstone, issued his list of Ten Surprises for 2018. “Byron defines a “surprise” as an event that the average investor would only assign a one out of three chance of taking place but which Byron believes is “probable,” having a better than 50% likelihood of happening.”
Byron’s Ten Surprises for 2018 includes
“The price of West Texas Intermediate Crude moves above $80. The price rises because of continued world growth and unexpected demand from developing markets, together with disappointing hydraulic fracking production, diminished inventories, OPEC discipline and only modest production increases from Russia, Nigeria, Venezuela, Iraq, and Iran.” Continue reading "Why $80 Crude Oil Is Highly Unlikely In 2018"
Risks of Saudi Arabia requiring a regime change are increasing, despite the OPEC production and non-OPEC production agreements. Fitch Ratings reduced Saudi Arabia’s rating to A+, the fifth-highest investment grade, and changed the outlook to stable from negative. The downgrade “reflects the continued deterioration of public and external balance sheets, the significantly wider than expected fiscal deficit in 2016 and continued doubts about the extent to which the government’s ambitious reform program can be implemented," Fitch said.
Saudi foreign currency reserves peaked at about $745 billion in 2014. They have dropped to about $525 billion, down $222 billion, or 30%. And despite higher oil prices in January, the reserves fell by $12.5 billion. The IMF has projected that the reserves may be entirely expended by 2020 if world oil prices do not recover sufficiently.
Note: The chart above provides reserves in SAR million
The government had budgeted crude prices in 2017 to average around $53 per barrel. I deduced that from the 2017 Budget of the Kingdom of Saudi Arabia (Page 21): Continue reading "Saudi Arabia's Regime Change Risk"
Hello traders everywhere! Adam Hewison here, discussing the situation in Iraq and how it could possibly affect the US and world economy.
After spending over $1 trillion and having lost the lives of over 4,500 brave Americans in Iraq, the country has once again imploded. I don't have to reiterate what is going on with Muslim extremists, but it seems they are hellbent to take over Baghdad, the capital of Iraq, and the rest of the country. It would appear now, Muslim extremists feel empowered to push their views to the max.
The Middle East has always been a problem waiting to happen, ever since the British left in the 50s. Arab unity seems to be the major problem in this area and one that's been going on perhaps for centuries.
I've always believed that the west's principal interest in that region was because of the crude oil (NYMEX:CL.N14.E) under the sand. I'm positive we would not even be there if they did not have vast resources of energy that the world is addicted to. The question now is, what is going to happen if Iraq and the oil fields are taken over by Muslim extremists and Iran? Should that happen, and the odds are becoming more and more likely that it will, it will produce a world that is totally different from what we know now.
I have been positive on crude oil (NYMEX:CL.N14.E) since May 19th at the $101.98 level (currently trading at $106.98). This market has the potential to continue in a very positive manner and move substantially higher, possibly to the $120 to $125 a barrel area. Continue reading "Crude Oil, Iraq and The Economy – Are We On A Collision Course?"