This is a well placed opinion ahead of today’s OPEC meeting. They may not cut production today; but they will soon.
“Countries with fiscal buffers are right to use them to smooth their policy adjustment to support growth, but still need to pursue fiscal consolidation over the medium term because oil prices are expected to remain low,” the IMF said. “There is no room for complacency even if fiscal buffers appear strong.”
Net foreign assets fell for a seventh month to $654.5 billion at the end of August. Saudi Arabia has raised 55 billion riyals ($14.7 billion) from debt issuance this year. While the country’s debt-to-GDP ratio was below 2 percent in 2014 — indicating capacity for more borrowing — the IMF expects it to grow to 17 percent next year.
Based off current burn rates and price of crude, the IMF projects the good folks inside of House Saud will run budget deficits of 20% and decidedly run out of reserves inside 5 short years.
The rhetoric has been ratcheted up in recent weeks and I suspect this is all setting the stage for a big oil production cut at OPEC.
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Commodity futures blood red. Oil about to gaped like a John Holmes film
Not liking my oil position and may ditch it soon.
I am an OILMAN…
Good riddance. This was the dumbest move in the History of Dumb Guy Moves.
It ranks up there with ‘Thief Backs Getaway Car Into Snow Bank, Leaves License Plate Number’ or ‘Guy Uses Credit Card To Purchase Pop Before Holding Up Gas Station’.
I hope at least one royal gets beheaded for this.
Way back Providence basketball star Marvin Barnes robbed a bus while wearing a team basketball jacket that had his name on it.
Production cuts by Saudi will boost oil prices to more than offset
the drop in barrels produced. Oil in 4 years will be back to $80-$100,
especially if a Bush gets handed another fixed election.
OPEC can jawbone a production cut, but they will all cheat because they need the money. Therefore, if any price spike does result, it won’t last long.